Updated over 5 years ago on .
Personal Home Refinance
Investment Info:
Single-family residence other investment in Ladysmith.
Purchase price: $144,000
Cash invested: $29,000
Personal home rehab for Home Equity Loan
What made you interested in investing in this type of deal?
We wanted land for our family and to make an investment by buying a home that needed rehab but was able to be lived in. This property would allow us through sweat equity and property equity to access capital for investing in rentals
How did you find this deal and how did you negotiate it?
I found the home on the MLS, we used an agent to negotiate the price from $150,000 down to purchase price.
How did you finance this deal?
Loan through local bank: 6.5% on 20 yr ammortization with a 2 yr balloon (extended to 3 years)
How did you add value to the deal?
Full scale renovation interior including; insulation, sheetrock, texture, paint, flooring, trim, new doors, T&G pine in office/sitting area, new cabinets, new electrical and plumbing fixtures, new water heater and furnace, cleaned out paneling from basement and redid wiring and water lines with pex. Put power in garage, insulated, covered walls and heated it.
What was the outcome?
Bought it for $144,500 invested cash of $30,000 down, about $29,000 for materials and sweat equity of about $32,000. Appraisal came in at $225,000. Refinance is for 80% = $180,000. This leaves us with about $62k available
Lessons learned? Challenges?
Typical renovation, always figure you will spend more than you anticipate. Be prepared for the appraiser. I bid the job just like I would for a client and gave the appraiser that info so he didn't have to figure out what I had invested in the property.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Real Estate Solutions. I would recommend them, they have a very efficient team and communicate frequently
