First 203K financed rehab.

[Marcus Holloway]

Investment Info:

Single-family residence buy & hold investment in Indianapolis.

Purchase price: $78,000
Cash invested: $124,000

Buy and hold. Used 203K funding for rehab

[Garrett Tierney]

@Marcus Holloway it sounds like you are happy with how this one turned out. I recently completed a 4-unit 203k with a renovation over $80k so I understand the additional red tape of dealing with a 203k consultant alongside your GC. I agree with you entirely on the idea that paying the consultant to come out for inspections and to sign off on draws for work completed is well worth the cost, especially if you do not have alot of experience with renovations! Despite the negative connotations surrounding 203k loans because of all the rules you need to follow, I believe it is a very powerful and relatively risk-averse strategy for new investors. Am I correct in assuming your down payment was 3.5% of the $123k purchase + renovation cost? If so, I'd like to know how much (if any) cash flow the property produces for you annually. As far as cash on cash return, I don't know if there is a better investment vehicle than a 203k for new investors. 

Think about this, Marcus may be all in to this property for, let's say, $4.3k down payment + $2.7k closing costs for an initial investment of $7k (let's work with round numbers here). If this property even produces $100/month in cash flow, you will see a 17%+ cash on cash return and have made your initial investment back in less than 6 years! For a buy and hold investor this is truly an awesome way to acquire properties, force equity, and see great returns all while you are learning and being shielded in a sense by working with a consultant to ensure the renovation is completed to acceptable standards! Great work @Marcus Holloway, if you get some time and can provide a little more feedback on your experience and the performance of the property I think everyone would benefit from learning more!