Second Project, Another Keeper. Beach House - Another Rehab Loan

[Tim G.]

Scooped up this deal direct from the seller at a very nice wholesale price.

1408 Minnesota Dr. Oceanside, CA 92054

3/2 1100sqft - 2 car garage - under a half mile to the beach (west of the 5!)

ARV - $400-$420k (hot neighborhood, its going to appreciate fast over the next year).

Repairs - $30k

Purchased for $307k with a conventional Rehab Loan (20% down) 4.35% 30 yr Fixed.

This one was found through driving for dollars, it took six months and two breakfasts with the sellers (Two elderly brothers who inherited it) to seal the deal.

Contracts signed March 13th, delayed closing due to the loan application on the fourplex and just closed it last week. They were super cool to let me extend closing a few times, saved me big time.

The loan is a Wells Fargo conventional Rehab loan. I had to put 20% down and I'm borrowing $30,000 to rehab the house. We are going pretty nice on this one but its small so it won't run too much.

If you have credit I would so HIGHLY recommend loans like these. All you need is for the property to appraise (based on repairs) higher than your purchase price and repair costs. The money borrowed is tied into the loan no separate payments.

Work began last week just with mild demo etc... Gotta do everything legit with permits due to the loan but my contractor is great and we are cranking out everything now.

I'm really stoked on this deal, the payment is less than my rent at a house down the street and its walking distance to the beach. This is a hard to find property in this area. Since a dumpster was placed outside three realtors have already shown up offering to help list it when its done. Sorry! Keeping this one!

I'll keep everyone updated, we are opening up the floor plan and adding a few other items. It's going to be a simple beach house to live in for two years, ride the wave up and dump it when the market is hot.

Here is a link to a photobucket album to view everything.
http://s1359.photobucket.com/user/AveWestREI/slideshow/1408%20Wisconsin%20Oceanside

[Tim G.]

Thought I'd give a quick update since July.

Well, first things first. I am a terrible rehabber and I will stick to wholesaling!

My first contractor who is a close friend and runs in my investment circles really wasn't up to the task. Probably a victim of being unable to say "no" and took on too much. This project was as a favor and he is not monitoring his crew and there is zero attention to detail.

We got in trouble for incorrect permits by the city had to regroup get new plans and engineering done and now I am 100% by the book.

After that we begun work again only to have a lazy and inconsistent crew doing okay work but very slowly and unorganized.

This carried on for a couple weeks and I finally pulled the plug this week and have started hiring out my own subs.

For the first time since the project started I will have a crew here on a Saturday and work should pick up fast. Used subs all from referrals from my rehabber friends and have Elec/HVAC/Framing set to finish this week for rough inspections then will get to work on drywall next.

Its been a great learning process and I'm actually living in the house now. I have no hot water and one working light in a room we setup for sleeping in. Its me and my dog and no friends could take both of us so I'll camp out here for now. I have wifi and a roof I'll be okay. It's been a tough learning process and very emotional to be so frustrated with a process. Reminds me a lot of when I started out wholesaling. So we will probably be about 10k over budget but thankfully the wholesales are rolling in faster than ever so I'm making up for lost ground quickly.

Stay tuned!