New Investment Venture

Real Estate Deal Analysis & Advice
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New Investment Venture

Jonathan OgdenPro Member
Member since 2025 · 2 posts · 2 votes

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $145,000
Cash invested: $110,000

Purchased a home in need of full gut remodel. 1107 square feet, 2 bedroom 2 bath. After remodel, should be an ARV of approx. $260,000.

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

Found the deal on the MLS. Sent letters to many agents representing distressed properties.

How did you finance this deal?

Bought the home with my cash. Funding the remodel with a HELOC

How did you add value to the deal?

Full gut remodel

What was the outcome?

Remodel is about to being

Lessons learned? Challenges?

My biggest concern is that there is an edition to the home that was not permitted. I did not understand this until I received quotes from contractors. This may come back to bite me. I will only know once permits are pulled and inspectors review the work.

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Dominic Mazzarella
Investor · Hendersonville, NC · Member since 2016 · 498 posts · 286 votes
5mo
Quote from @Jonathan Ogden:

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $145,000
Cash invested: $110,000

Purchased a home in need of full gut remodel. 1107 square feet, 2 bedroom 2 bath. After remodel, should be an ARV of approx. $260,000.

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

Found the deal on the MLS. Sent letters to many agents representing distressed properties.

How did you finance this deal?

Bought the home with my cash. Funding the remodel with a HELOC

How did you add value to the deal?

Full gut remodel

What was the outcome?

Remodel is about to being

Lessons learned? Challenges?

My biggest concern is that there is an edition to the home that was not permitted. I did not understand this until I received quotes from contractors. This may come back to bite me. I will only know once permits are pulled and inspectors review the work.

Hey Jonathan, the unpermitted addition is the part I’d focus on immediately. I’d talk to the building department before you get too deep into the rehab. Not in a panic, but you want to understand whether they’ll let you permit the current work around it, whether they’ll require plans, whether anything has to be opened up, and whether the addition can be brought into compliance or needs to be removed/altered.

The numbers may still work, but unpermitted square footage can change the deal fast if it affects scope, timeline, appraisal, insurance, or resale.

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  • Jaycee GreenePro Member
    Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
    5mo
    Quote from @Jonathan Ogden:

    Investment Info:

    Single-family residence buy & hold investment.

    Purchase price: $145,000
    Cash invested: $110,000

    Purchased a home in need of full gut remodel. 1107 square feet, 2 bedroom 2 bath. After remodel, should be an ARV of approx. $260,000.

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

    Found the deal on the MLS. Sent letters to many agents representing distressed properties.

    How did you finance this deal?

    Bought the home with my cash. Funding the remodel with a HELOC

    How did you add value to the deal?

    Full gut remodel

    What was the outcome?

    Remodel is about to being

    Lessons learned? Challenges?

    My biggest concern is that there is an edition to the home that was not permitted. I did not understand this until I received quotes from contractors. This may come back to bite me. I will only know once permits are pulled and inspectors review the work.

    Hey @Jonathan Ogden, welcome to the BP Forum! How much do you expect the rehab to cost, time to complete, and post-rehab rent? Good luck!

    [email protected]
    0Reply
  • Jonathan OgdenPro Member
    OP
    Member since 2025 · 2 posts · 2 votes
    5mo

    Hello Jaycee, Rehab will be close to $100k and will take about 3 months. Rent expected to be $1750. Thanks.

    0Reply
    • Jaycee GreenePro Member
      Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
      5mo
      Quote from @Jonathan Ogden:

      Hello Jaycee, Rehab will be close to $100k and will take about 3 months. Rent expected to be $1750. Thanks.

       @Jonathan Ogden Do you have a personal connection to this property or neighborhood?

      [email protected]
      0Reply
    • Dan H.Pro Member
      Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
      5mo
      Quote from @Jonathan Ogden:

      Hello Jaycee, Rehab will be close to $100k and will take about 3 months. Rent expected to be $1750. Thanks.


       I do not understand what motivated you to purchase this property.  
      purchase price: $145k + closing costs

      Rehab: $100k plus small (due to 0% LTV) holding costs for 3 months of hold.

      Total investment $245k plus closing costs plus holding costs.

      ARV: $260k, max potential profit is less than $15k if everything goes to plan.
      This ARV implies an appreciation rate near CPI.

      Issue of not having a permit which likely implies no pre purchase inspection.  It means not everything has gone to plan.

      Less than $15k profit for that level of work/risk.

      rent $1750/month.

      50% rule projects $875/month of cash flow, $10,500/year.

      $10500/$245000=0.0429 is 4.29%.   Maybe 3% from appreciation.  No multiplier due to no leverage.  No equity pay down due to no loan.   Total 7.29% return.

      Please tell me that you did not purchase RE for a projected return on less than 8%.   Please tell me you did not take on a $100k rehab for less than $15k of profit.

      Please tell me that you have another plan.


      good luck

      0Reply
  • Dominic Mazzarella
    Investor · Hendersonville, NC · Member since 2016 · 498 posts · 286 votes
    5mo
    Quote from @Jonathan Ogden:

    Investment Info:

    Single-family residence buy & hold investment.

    Purchase price: $145,000
    Cash invested: $110,000

    Purchased a home in need of full gut remodel. 1107 square feet, 2 bedroom 2 bath. After remodel, should be an ARV of approx. $260,000.

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

    Found the deal on the MLS. Sent letters to many agents representing distressed properties.

    How did you finance this deal?

    Bought the home with my cash. Funding the remodel with a HELOC

    How did you add value to the deal?

    Full gut remodel

    What was the outcome?

    Remodel is about to being

    Lessons learned? Challenges?

    My biggest concern is that there is an edition to the home that was not permitted. I did not understand this until I received quotes from contractors. This may come back to bite me. I will only know once permits are pulled and inspectors review the work.

    Hey Jonathan, the unpermitted addition is the part I’d focus on immediately. I’d talk to the building department before you get too deep into the rehab. Not in a panic, but you want to understand whether they’ll let you permit the current work around it, whether they’ll require plans, whether anything has to be opened up, and whether the addition can be brought into compliance or needs to be removed/altered.

    The numbers may still work, but unpermitted square footage can change the deal fast if it affects scope, timeline, appraisal, insurance, or resale.

    1Reply
  • Sam Shaer
    Contractor · Member since 2026 · 13 posts · 0 votes
    5mo

    Sounds like a strong value-add opportunity.

    We specialize in residential remodeling projects throughout Greater Los Angeles, including full remodels, ADUs, additions, backyard & pool projects and exterior renovations designed to improve both functionality and property value.

    Looking forward to seeing the transformation. Happy to connect if you ever need a reliable GC team for future projects.

    0Reply
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