Whoops ! 15k Mistake

[Chris Adams]

One of my last rehab purchases is an interesting story. My realtor called me one day and said go look at this house, its exactly what you want for your rental fleet.

At that time the house was on Auction.com and when I did my 1st drive by I said no I'm not going to play the games that company puts you through. So I ignored the property.

A month goes by and I'm having zero luck finding a property, So I drive by the previously mentioned house again. And I notice the Auction.com sign is down, so I called my realtor. He tells me the house was sold thru the auction. O well, I'll just keep looking.

At this time the house had sold at $68k, 2 weeks later I get the call from my realtor that the deal feel thru, the house was off auction.com and he was going to be listing it on the MLS and this was going to hit first thing is the morning.

He is being pretty adamant that I get inside this house, and take a good look at it. My wife and I bounce this information around, and I dig thru my files to pull up my previous spreadsheet analysis on the property. My comps showed an ARV of $90k, I confirmed with my realtor and he agreed low $90s was tops for value.

Ok lets go, and we drive over there and walk thru the place. There are 2 roof leaks and the drywall is falling down in both areas its so wet, but the roof was new! I literally stuck my finger thru the ceiling. Other than that, the rehab was basic lipstick, paint carpet and a few minor things like counter tops. I popped on the roof and sure as heck someone didn't know how to install the flashing around the bath fan vents.

So I pick up the phone and call up my realtor to ask what the listing price is going to be. He says $63k. I told him to write up the offer at $50k, cash, no contingencies.

(The best time to buy a home is right after a deal just fell apart on it)

Son of a gun, they took it.

Now my wife and I do 90% of the rehab work ourselves, so my total cost to rehab was $8k, including the w/heater I wasn't expecting.

Thats ok, the house is worth $90k and I'm in for $60k. Thats still a pretty sweet deal for 3 weeks of work. I'll refi the thing and pull out some cash, and add it to my rental fleet. Which I did, Ive got a good tenant in there giving me $900/month w a 1yr lease.

BUT WAIT, today I got the appraisal back for the refi I'm working on.

$105k!!! Thats $15k over my realtors, and my own comps. After doing some probing I found that late summer sales where doing extremely well in my area.

I hate when I make mistakes, but if i have to make one this is the kind I want!

And I didn't even want the house lol.