$300k / 119% gain in 7 yrs in Durham, NC. Mid-Century Original to MCM Marvel!

[Danielle Malecek]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $253,000
Cash invested: $45,000
Sale price: $565,000

We purchased this as our first home and listed the home as a short-term rental while transitioning to our new home in the mountains.

The single-story brick ranch, built in 1967, was purchased from the original owner. It was without floors in 2/3rds of the house, and with nearly all the original decor. With seller credit, we installed wood flooring throughout the home, with the exception of the mudroom and basement, where we installed LVP at our own expense.

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

Initially, we wanted a primary residence home that we could eventually become a turnkey rental. I was also attracted to the large lot (.69 acres) with near proximity to downtown Durham. Finally, we knew there a number of improvements like a fresh coat of paint on the wood paneling, removing the popcorn ceilings, and small bathroom remodels, wouldn't cost us a lot of money out of pocket, but would provide us a modern appeal.

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

We found this deal through our realtor. Since the home was without flooring and we were financing, we were able to secure a $12,000 credit from the seller and they were kind enough to let us install flooring during the due diligence period.

How did you finance this deal?

We did, but we had to make sure that the home was in good and working condition (i.e. Flooring must be installed!) before hand. We put down 10% and had a HELOC on the remaining 10% for the downpayment, with a 30 Year mortgage at 4.375%.

How did you add value to the deal?

We updated nearly the entire house:
- installed new lighting
- updated bathrooms with new fixtures and a fresh coat of paint
- Partially painted exterior (brick) and modernized architectural features with new wood
- Added 8 ft Privacy fence with a motorized gate to provide access to the garage

What was the outcome?

After commissions and other selling expenses, we had a gain of $300,000 at close, with just under $45k total investment

Lessons learned? Challenges?

I wish we would have used the HELOC on our home to make some additional updates.

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

Adam Dickinson from Nest Realty in Durham was outstanding helping us to sell the home. He gave us ideas on what else we could do to achieve a higher list price during a particularly challenging time in the market.