House Bought for $2,400!!

[Payton Pearson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $2,400
Cash invested: $52,400

This is a BRRRR property. It is a 50k renovation. Property will probably be worth around 75k after all repairs, and will rent out for around $850/month. I know, not super sexy, not the most amazing deal you can imagine, but in the difficult market right now, it's pretty nice. Also, I'm seeking to increase monthly cash flow while beautifying the world--I'm not super gung-ho about over-leveraging, especially in this market.

What made you interested in investing in this type of deal?

It scarcely matters what kind of back taxes a property has, other liens, etc. if you can buy it for less than $3,000! Even if you let it stay fallow for a year or two, it doesn't really make a difference. You can renovate it on your own schedule, and don't have to lose hair over immediately getting an ROI. This is a decent idea for those who have the resolve to actually accomplish the task, and not just completely forget about it.

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

I found it from my property manager. Originally it was selling for $1,500, but the wholesaler pulled a fast one... I didn't mind, even though it was sleazy, because it was still cheap. I'm not going to split hairs over $1,000.

How did you finance this deal?

Bought cash, renovated cash.

How did you add value to the deal?

Fully renovated, and removed a blight from the neighborhood.

What was the outcome?

Renting out for over $800/month, pure cash flow. Taxes aren't very high--only about $100/month. Insurance is under $30/month.

Lessons learned? Challenges?

If you can buy a property for under $3,000 in a market where properties are renting out for around $600 to $900/month, why in the world would you not buy it?! What else are you going to do with that $3,000? Sure, maybe you can leverage it, but it's really very little money.

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

Steven Leopold, my property manager.