Real Estate is hard.....but so worth it!

[Kenton LeVay]

Investment Info:

Single-family residence other investment.

Purchase price: $200,000

Bought for $200k on 12/31/2018, this was originally a SFH House Hack. I lived in one bedroom and rented the others while rehabbing the property. I ended up doing a cash-out refinance at 80% LTV on an appraisal of $339k. To the dollar, I got everything I originally invested back out of the deal despite going over-budget on my rehab (it was my first rehab! Lessons were learned...) and am cash-flowing at $800/mo!

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

It was my first deal. I bit off more than I could chew - combining a BRRRR and house hack in one. I tried to maximize my return and this was the best way I knew how at the time.

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

It was listed at $200k, I offered $205k the first day it was on the market. Was able to negotiate back down to $200k after the inspection.

How did you finance this deal?

Original Purchase: 20% down, 30-yr fixed, 5.25%
Rehab: Self-financed

Refinance: 80% LTV, 30-yr fixed, 2.875%
HELOC: 100% LTV, variable interest

How did you add value to the deal?

Did a full rehab: new kitchen, bathrooms, tore down a load-bearing wall separating kitchen and living area, floors, paint, landscaping....the works

What was the outcome?

Refinanced in July-2021 and got every dollar invested back out and am now cash-flowing at $800/mo!

Lessons learned? Challenges?

I suck at and am not a fan of DIY rehabs. Also, the cheapest labor is likely going to cause more headaches than it's worth. I tried to save every dollar I could so I started doing the project DIY. Turns out, I had no idea what I was doing so the project was taking way longer than I would have liked and stressing me out beyond my normal W2 job. Then I hired the cheapest labor to finish. They stopped showing up. Then I hired a better contractor to finally finish.