Updated over 4 years ago on . Most recent reply
Trap house buy & hold
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $450,000
Purchased the home for $303,000. It was a trap house but the lot was too small for larger investors to build new. I put $150,000 into renovation through a renovation loan. Current estimated value of $700,000.
What made you interested in investing in this type of deal?
It was next door to my first rental/ house hack and had been causing trouble on the street. Our niche is large rehabs ($100-$150K in rehab costs).
How did you find this deal and how did you negotiate it?
This deal was next door to our first deal/ house hack.
How did you finance this deal?
Renovation loan.
How did you add value to the deal?
We redid all major systems, demoed and rebuilt an extension, all new kitchen, bathrooms, floors, walls etc. We also added a "airbnb" suite with it's own exterior entrance, kitchenette and bathroom.
We also raised the value of the homes around it by removing the drug dealers and users from the street. We often had to kick people out of the property during the year of waiting for permits and construction.
What was the outcome?
The home is now estimated to be at $700,000
Lessons learned? Challenges?
Rehabbing a home during the pandemic taught me to:
1. be prepared for longer than expected holding costs.
2. Don't order appliances from Lowes during a pandemic (your stove range delivery will hold up inspections and delay the project).
3. Porta Potties attract homeless people on a construction site.
4. If you do have to board up a property, free hand a mural to lessen the effects of the broken window theory.
5. Keep up lawn care - an unkept lawn makes ppl think it's abandoned
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Absolutely. Jonathan Rich of JRich Atlanta is phenomenal real estate agent and investor!