Nailed It (Pun very much intended)

[Tegan Lehman]

Investment Info:

Single-family residence buy & hold investment.

A quasi-Brrrr. We always intended to add a bedroom and bathroom, but ended up gutting the existing structure also. Took the property from 2 bed 1 bath to 3 bed 2 bath.

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

We would have preferred something that was at least 2 units, but Columbus is very competitive market these days. We didn't have the cash to go much bigger on this first project. As it was, we only were able to get this by using creative financing. The fact that the property was in a condition that no traditional lender would consider worked to our advantage.

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

@Brandon Sturgill found us this deal on the MLS. He also got the price down 14% from asking based on the condition of the basement.

How did you finance this deal?

Finance of America Fix and Flip loan (Do not recommend. We used this because it's our first property and we didn't have the cash. They made us regret using them at every stage of the project.)

How did you add value to the deal?

The property had a breezeway and garage all under the existing roof. We finished those into a master suite and extension of the existing kitchen, increasing square footage by 60%.

We did the majority of the work ourselves. My partner/brother-in-law is in construction and did most of the work, but it was a family affair.

What was the outcome?

We'll find out when I catch up with my book keeping? We left some cash in the deal, but not much. Market increases were enough to cover our beginner errors. We did the real estate equivalent of falling up the stairs.

Lessons learned? Challenges?

So many challenges. An inherited tenant who took 70+ days to get out, then left the place a disaster--literally with rotting meat on the floor. The lender sold themselves as "like a hard money lender" but required a ridiculous amount of documentation to access rehab funds. A zoning variance that we didn't think we would need resulted in a 151-day waiting period for building permits. The jobsite had 2 break-ins that cost us ~$2k.

But just think how prepared we'll be for the next one!

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

@Brandon Sturgill