First Renovation - Hillsdale

[Laura Kelso]

Investment Info:

Single-family residence buy & hold investment in Grand Rapids.

Purchase price: $142,000
Cash invested: $46,000

This home had been lived in by the same family for many years. The mother and father were in transitioning into assisted living. The home was renovated from top to bottom. The upper floor had 2 nice-sized bedrooms that got a full cosmetic makeover with new paint, lighting, and carpet. The main floor was more extensive and required a wall to be taken down to open up the kitchen and living room area. The kitchen was torn down to the studs and redesigned with all new cabinets, appliances, and granite counters. The main floor bath was also gutted and redone and all wood flooring was professionally refinished. The lower level was also gutted and cracked walls were reinforced. The lower level also received new electrical, water heater, paint, carpet, windows, and a new drop ceiling.

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

The opportunity to add a lot of value to a home in a nice neighborhood and good school district.

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

The owners were family friends the deal was a win-win for all involved.

How did you finance this deal?

By using a home equity line of credit on our current home.

How did you add value to the deal?

By doing much of the grunt work and painting myself.

What was the outcome?

This home will be turned into our first rental property and is now cash-flowing.

Lessons learned? Challenges?

That everything takes twice as long as you think it is going to. I should have had the home inspected prior to purchase to have a better idea of the true scope of work.