Getting off course and still landing on a win

[Colin Young]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $111,000
Cash invested: $23,000
Sale price: $200,000

I purchased this property as a live-in flip while also renting out 2 of the 4 bedrooms. Expenses were covered while my wife and I made updates and repairs to the house. We sold when we saw fit in order to roll the proceeds into a small multi-family investment property.

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

My wife and I needed a place to live while also having an opportunity to build equity, cashflow, and eventually sell for a profit. This house was in an area which we saw up and coming, and has since almost doubled in value from when we purchased the property.

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

I was looking actively for the better part of a year. We were originally looking for 2-family properties to house hack, but none were in areas we actually felt happy living in. This single family came on the market and we went to the open house and it was love at first sight. The house was dated, not flashy, but in great condition. The foundation was solid, floors were level, the original wood work was well maintained and it was in an ideal location.

How did you finance this deal?

We used an FHA loan to purchase the house. We had to actually go in to fix some chipped and peeling paint and install hand rails before we closed in order to pass FHA Appraisal, but it all worked out.

How did you add value to the deal?

Added Central A/C Coil to existing gas forced hot air unit.
Replaced 60A with 200A service/panel
Finished the attic into a large 450SF bonus room.
Touched up the kitchen by improving the countertops, cabinet pulls, light fixtures, and added more outlets.
Installed snap-and-lock LVT in the 1/2 bath along with new vanity.
Updated paint color scheme throughout majority of house.
Updated light fixtures.
Cleared grubbed major overgrowth on property.
Build storage shed.
Landscaped
Sealed driveway

What was the outcome?

We were able to live in the home virtually for free for 3-years, and sell for a substantial profit in October of 2020. The area we were in became more desirable, and the market in general was hot so we decided to sell and take the cash into the next deal.

Lessons learned? Challenges?

The major lesson learned was to stick to a plan when it comes to real estate investing. When I set out to buy an investment property, my plan was to purchase a 2-4 unit property. I ended up getting emotionally attached to this house (partly because it was awesome and partly from desperation of need a place to live) and although it worked out well, I spent a lot of time and effort forcing this single-family to meet my investing goals when it wasn't ideal for that.

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

Jean Singleton - Lic. RE Assoc. Broker at Capital Realty Experts
Mark Favaloro - President of the NY Assoc. of Realtors - Owner of Aamtrust Mortgage

I worked with an agent, Jean for the purchase of the home. She was terrific and definitely recommended for a first time home buyer.
I also worked with Mark for our lending needs, and he is also highly recommended for mortgage financing.
Both are true professionals that I now work with as an agent at Capital Realty Experts.