All Forum Posts by: Brian Washburn

Investment Info:

Single-family residence buy & hold investment in Omaha.

Purchase price: $90,000

Cash invested: $41,000

-3BR/1BA. 1900+ Sqft.
-Located near 2 major hospitals and 3 Universities
-Original Rehab included 100% new bathroom, 100% new plumbing in the house, electrical updates, all new flooring, all new paint, and the addition of one new wall to create a "true" 3rd BR.
-Rent = $1,300/Mo

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

I found this property by setting up new listing alerts on the MLS. I received an email the day this house was listed. List price should have been $120-$140K, but the seller was trying to avoid foreclosure. We ended up paying full list price ($90K), but got the seller to put on a new roof.

How did you finance this deal?

Small business loan to our LLC. We put down 25%, and took a loan for the remaining 75%, with a 15 year term and 5.5% interest. Rehab was all paid with cash out-of-pocket. I teamed up with a partner who provided 75% of the money. Since I did the work and manage the property, we split equity 60/40.

How did you add value to the deal?

Every "surface" in the house is new, with new paint, new floors, painted cabinets, new appliances. Completely re-built the bathroom, and replaced all plumbing in the house.

What was the outcome?

Got a great set of tenants and completed the full renovation in 6 weeks (while also welcoming a 2nd child!!). My agent toured the house and said if she were to list it today she would go in at $180K. While I think it would sell closer to $150k, that would still be a $60K increase.

Lessons learned? Challenges?

Lessons Learned:
1.) Home Inspections (while important), can be pretty bad at catching major issues. Don't trust the inspection alone
2.) When the whole house needs interior paint, HIRE IT OUT. The extra cost is worth the immense time savings, and you'll get a more quality result.

MANY other lessons learned, as this was my first deal.

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

Agent: Gina Hodge with BHHS
Lender: Cole Grotsluschen with Frontier Bank

Both were great!

Shout out to @Logan Fast for help with the Lease!

@Collin Schwartz you got me all fired up on this cold Monday morning! Very inspiring. I haven't been able to make it to a meetup for the past several months, but hope to be there this Wednesday. 

@Josh Lyons Minivan Minivan Minivan! I am rehabbing my first house right now with a 2009 Town and Country and it is PERFECT for the job. Plus, I can make it seat 7 in 2 minutes if needed. 4L V6 has plenty of power and gets better mileage than a truck. Easy to lock, protected from weather, holds 4x8 sheet goods, which most trucks cannot do. I've been having some "truck fever", but when I think about the features I would want in a truck I keep coming back to the realization that a minivan is what I need! Finally, since so many people think vans are "lame", I was able to get a 2009 loaded with every option and only 80k miles for $9500!

Rehab looks great! But I agree with the others here. I don't see any possible way this house cash flows as a rental. Good luck selling!

Hi all! Thanks so much for all the input. This is the most feedback I've ever got to a post! Here is what I decided to do: We are going to replace all the carpet for new carpet. Kitchen, laundry, bonus/mudroom, and bath will all get vinyl plank. There are some issues with the floors in the house slanting, sloping, and having unevenness. In the next 3-5 years I may want to try some things to even out the floors, which would require me to tear out flooring. With this uncertainty, I don't want to spend money on long lasting floors. Carpet from Lowes will cost me $1.47sqft installed, about $1700 total and will make a HUGE difference in the look (and smell) of the house. Thanks again all!

@Matt K. All very good questions!

@Owen Dashner @Peter M. Thanks for the input. The house was built in 1896 so the floors are not the smoothest underneath, and there is some sloping/slanting in some of the rooms. How does that effect your answer to my dilemma? Owen, I like what you said about it improving my applicant pool. It's at 42nd and Center, listed for $1300 and I feel like I am only getting bites from applicants who could not afford to make rent. I was hoping the closeness to VA and UNMC would get me some better applicants. Thanks again guys!

I just bought my first rental in Omaha, NE. It's a 3BR 1BA with 1900sqft. I'm putting about $6k into renovations, including rebuilding the bathroom from scratch and new kitchen vinyl floors. The house has about 1000sqft of gross carpet that is probably from the late 80s. A couple people have looked at the house and asked me if I am replacing the carpets. Our plan was to spend our money on the updates we are doing, and replace the carpets in a couple years using cash from rent. Should we stick to our plan and wait a couple years to update the carpet, or spend and extra grand on carpets now?

Note for any new investor reading this in the future: @Brandon Turner's book on Managing Rental Properties should NOT be overlooked. This book answered many of my questions, and alerted me to things I had not even thought of. I learned A LOT.

But the real value in getting this book is the LANDLORD FORMS!!! Renter Applications, Lease Agreements, Addendums, Disclosures, Notices.... you get them ALL! My lawyer would have charged me $1,000 for all these easily. 

Thanks for all the great info/advice! Cozy seems like a really great tool. Almost too good to be true for being free.

I'm still looking for more advice on where to get a good lease. I know I can go to my attorney but he will likely charge me $1k for a standard lease that is already written and has been used a million times.