Investment Info:
Single-family residence buy & hold investment in Bladensburg.
Purchase price: $205,000
Cash invested: $11,000
My husband and I bought an REO property and made it our home for three years and flipped the property ourselves. I do not have the total amount of money that we put into the property. We did most of the work ourselves (not the roof, or the windows) which helped with the budget. The cash invested that I have listed is what our closing costs came to approximately.
What made you interested in investing in this type of deal?
Our budget! We were living on one income with two young kids. We had done a live-in flip in Philadelphia that was successful, so we decided to do the same when we relocated to the DC metro. The numbers are what determined our decision to keep the property to rent vs. selling it. We originally were planning to sell after a few years of renovations but decided to hold onto it.
How did you find this deal and how did you negotiate it?
We used a realtor and he showed us SO many properties, I'm sure he was tired of us. After a couple of unsuccessful lowball offers in the area, we decided to go with the asking price for this offer. The bank came back with a multiple offer situation and asked for the highest and best. We offered $1,500 more and it was enough to seal the deal.
How did you finance this deal?
At the time, this was going to be our primary home, so even though there was a hole in one of the bathroom floors, we were approved for FHA financing and used our own cash for closing. Our credit union offered $1200 for using a realtor in their network after closing.
How did you add value to the deal?
Blood, sweat, and tears. Lots of late nights renovating while our children were sleeping. =) Every surface of the house has been redone. We have a wonderful second-hand home store very close to us where we purchased kitchen cabinets, hardware floors, etc. Good for the environment and good for our pockets.
What was the outcome?
An adorable little bungalow a mile outside DC that has approximately $150k+ equity in it. It cash flows beautifully and is paying for itself and some of my current mortgage!
Lessons learned? Challenges?
Moving from Philadelphia to the DC metro we had no idea what the market difference was. We went from buying our first house for $78k to almost triple that amount for a FIXER in the DC metro. Lesson learned- know the market you're buying in.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Had I been a part of the bigger pockets community earlier, I probably would have found an agent on here or a more investor-savvy realtor to work with. Having said that, I'm an agent now and a beginning investor myself, so I'd love to help you find your next deal! I work with a team of agents that help me complete timely and smooth transactions.
