Breaking down my first deal

[Emma Duncan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $25,000
Cash invested: $35,000
Sale price: $80,000

Brrrr’d this one and have a long term tenant renting it out.

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

This was my very first property. I wanted something cheap to learn some lessons on. The house is near a rehab center and was being slowly updated by a couple guys after they came out of the rehab center but were staying nearby for support. Electrical, plumbing, AC and water heater had all been replaced or upgraded.

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

Facebook marketplace. I paid what they were asking as it was a fair deal.

How did you finance this deal?

I saved up for the down payment and went to a local bank for the rest of the purchase price and rehab loan.

How did you add value to the deal?

Fixed foundation, put down LVP throughout the house, added a dishwasher, fixed broken windows, painted interior & exterior, replaced the roof.

What was the outcome?

It took a year to get to the cash out but it appraised for way more than I expected at $97,000. I took out a loan for $75,000 and that paid back all of my original costs.

Lessons learned? Challenges?

Huge lesson learned on the contractor on this one. He was paid in 3 installments and after the second one ($15k) just took the money and walked. Thankfully he did the hardest part (foundation repairs) with that first draw before he walked with the money.

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

Not really, just kind of figured this one out on my own. The local bank was helpful as far as approving a loan/rehab that was under 100k which I know most banks will not do. The interest rate was high but definitely worth it to get my first deal done.