Before & After 2 House Waterfront Property

[Aaron Foster]

I always enjoy looking at before and after pictures and storie so here is one of my recent ones.

Facts: 2 houses 1 waterfront lot for $160k. Approx 35 Minutes to Washington DC and 1.5 miles to one of our many Military Bases. 

Obstacles: No comps to get a residential loan and the houses were a bit beat up so a commercial loan wouldn't approve until the houses were renovated. 

Solution: Paid about $500 for a commercial "subject to appraisal (or the value once the renovations are done) which came back at $285k ARV. I knew at that price point it was a good long term buy and hold. I purchased the property with Hard money; 13% with 3 points and kept using the mortgage while the houses were under renovation. I refinanced into a commercial loan after completing the renovation at 1% over prime (5.5%). I had to have the property re-appraised after renovations were done for the commercial loan; it came back at $325k this time. The lender (a credit union) gives 80% of appraised value which would be $260k.

All in all I was into them for around $240k. After the re-fi I decided to pull out $225k (instead of $260k) and leave a little of my own cash wrapped into the deal and keep a bit more equity in the property. (some for tax purposes)

Mortgage is $1385 (doesn't include taxes and insurance). Combined the houses rent for $2850.

Below the Images aren't in the right order but gives you an idea of before and after. 

[Stephanie P.]

@Aaron Foster

Really nice job and fantastic use of other people's money.  That's the way it's done.

Congratulations

Stephanie