Property inherited and unwanted by out-of-state only adult child
Investment Info:
Single-family residence buy & hold investment in Cleveland.
Purchase price: $34,017
MLS listing. Realtor works with investors. Multiple offers - my wasn't even the highest - but it was a simple, no-inspection offer. House is passing thru a probate thus delaying my taking ownership; inked the deal July 3rd.
ARV - $75,000. 3/1, 1100 square feet and a nice layout inside. Purely cosmetic: kitchen and bathroom upgrades, paint and flooring.
All-in I'm at 60% of ARV. Private Money lending me $43,000; 34k for purchase and 9k for easy, minimal rehab. PML is for min. 6 months at which point I'll refi with a lender and be able to get cash out, too, since their seasoning is 6 months of ownership. PML getting 1.25% monthly interest-only payments.
OPTION A: Refinance and rent out at $1000-1100/month. I have one on the same street making $900/month
OPTION B: List for sale at 90k.
What made you interested in investing in this type of deal?
The numbers were fantastic. Realtor works often with investors so she knows how to price the homes to move AND win for sellers and buyers
How did you find this deal and how did you negotiate it?
MLS. I called listing agents office. Realtor said they have multiple offers coming in, but she would hold it for me to see the next morning. I won the acceptance and wasn't even the highest offer!
How did you finance this deal?
Private money from a friend of one of my college friends.
How did you add value to the deal?
I’m going to increase the size of the 1st floor full bathroom by a simple foot or two. Update the kitchen with quartz counters and paint the really nice shape cabinets that are in there now. Paint the walls and sand and stain the original beautiful hardwood flooring.
What was the outcome?
Deal hasn’t closed yet, but it’ll take about 2 weeks to rehab and while that is occurring I’ll start posting on zillow rents for a solid tenant.
Lessons learned? Challenges?
You can get deals off the MLS. No real challenges here - this property is textbook.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
The realtor is Noel Hall out of Keller Williams Citywide, Cleveland OH. After this home and the connection we felt with each others skills, she showed me another home to rehab and flip. That home is with an attorney to draft a Land Contract agreement. And, she and I have an offer out to a 3rd seller in one month who is thinking over our proposal.
