Cape Coral: Rehab/Rental

[Alvin Taveras]

Investment Info:

Single-family residence buy & hold investment in Cape Coral.

Purchase price: $151,000
Cash invested: $44,000

The house smelled like cat piss, rising damp, had unleveled flooring, everything outdated & more.

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

I buy properties that give me options. With this property I had the option to 1) flip w/o repair, 2) flip w/ repairs & Rent, then refinance. It also had a lot of problems that would drive the price down but that I know how to solve.

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

I bought this property through a buddy in the medical field (Paid him an assignment fee). Women from WPB was going to inherit this property. I sent an offer without seeing the property and unaware that she was even interested in selling. I received a signed accepted offer the same day the owner passed away. I think the woman receiving the inheritance wanted to sell before anyone would dispute her inheritance.

How did you finance this deal?

3% Conventional Loan @ 3.7% interest. MI of $100 per month drops after 6 months due to having over 20% in equity.

How did you add value to the deal?

I did all of the obvious repairs needed and at every opportunity, I chose to use premium material (quarts sparkling white counters, Sterling Oak plank flooring, 6in baseboards, hands-free brushed nickel pull-down faucets).

What was the outcome?

Cash Flow Math
1,700 - Income
200 - Expenses
950 - Debt Service
$550 = Monthly Cashflow

Flip Math
11,000 - Accusition Cost (DP & closing cost)
143,000 - Left on Mortage
33,000 - Rehab
12,000 - Selling Cost
$199,000 = Total Cost
$255,000 = Sale Price
$56,000 = Net at closing

Lessons learned? Challenges?

1. Always be ready to close and make a lot of offers

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent - Alvin Taveras
Lender - Dawn Houser @ American Eagle Mortage
Finding Contractors - Cape Coral Investor Network