Investment Info:

Single-family residence buy & hold investment.

Purchase price: $95,000

3 Bedroom 1 Bath to 4 Bedroom 2 Bath SFH renovation purchased in our first LLC ‘partnership'. The LLC is owned by our trust (75%) and our partner (25%). For our ownership % we are responsible for finding the right properties, funding/securing the property and renovation budget, and then managing the rental phase while our partner completes/manages the renovations and rehab.

What made you interested in investing in this type of deal?

We focus on on SFH in the suburbs of St. Louis, MO and this property has a lot of potential with our largest rehab to budget date.

How did you find this deal and how did you negotiate it?

A colleague of mine who knows that we rehab properties for rentals and referred us to the owner (his sister) who lives out of state but has been trying to sell it. The property had renters in it who had completely trashed the property and continues to live in the home with under-market rents and poor maintenance.

How did you finance this deal?

I funded the purchase and rehab with a Home Equity Line of Credit on our primary residence.

How did you add value to the deal?

Widened driveway to support multiple cars, completely renovated the kitchen with new cabinets and appliances, completely renovated the upstairs bathroom with new everything, refinished all floors, replaced all windows by framing down custom window spaces to fit standard windows, upgraded the electrical box and buried the service, painted the exterior, finished the basement to add another bedroom, full bathroom, and living space.

What was the outcome?

Work is still being completed but we are on budget and this should be our largest return to date.

Lessons learned? Challenges?

This is our first JV in our new LLC with a partner. I am not the handy type and absolutely hated working in our prior renovations and was happy to hand over 25% of our business to work with someone skilled and knowledgeable in this space. We're still learning to fine-tune our processes in communicating the work regarding timelines, expenses, and schedules but it has been positive so far. We just picked up another smaller home to work on concurrently with this one and will reflect after.