Househack to HELOC in 4 months

[Brian Gilbert]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $8,000

Purchased a distressed property post divorce as a primary residence. Made it habitable for the myself and kids, and then remodeled significantly to HELOC and rent out. Currently have a long term renter in place and home reappraised at over 300k.

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

I needed a place to live. While looking up videos on DIY projects, REI videos started to pop up and I became interested in becoming FI. I realized that I could remodel the home that I had purchased at a bottom price because of it's condition and either cash out refi or pull a HELOC. Due to the sudden increase in rates, I pulled a HELOC out that my tenant now pays back for me.

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

My real estate agent found it, knowing that I needed more for less. It was in bad condition, with the exception of the roof/AC/Septic pump that had all been replaced the year before. The home was an investment that became bad for the wife of the investor after he died.

How did you finance this deal?

FHA. I only had to put $8k down.

How did you add value to the deal?

I repaired walls, remodeled the kitchen and two bathrooms, repainted and refloored the entire house.

What was the outcome?

I was able to get a renter in place at market rent which is double my mortgage on the house. I then pulled a HELOC out that I intend to use on the next deal. The property cash flows at $1100 a month currently.

Lessons learned? Challenges?

Always have a back up. My first contractor flaked and had I had a back up contractor, I could have refinanced the property and taken cash out, had the project not been delayed.

[Brian Gilbert]

@Lawrence Potts correct, and I was in it for a year before I decided to remodel, HELOC and rent it out, so the 4 month timeline is based on basically when I figured out that REI was a thing. I had originally planed on slowly remodeling and then selling to get a bigger property, but then I found BP and REI