My First Investment!

[Melissa Thomas]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $186,000
Cash invested: $100,000

Currently doing a major rehab on an A-Frame Property in northern Wisconsin. Renovations have been more than anticipated and are taking longer. We are looking to have the property up and running as an STR by early May 2023. Not currently cash flowing.
The property has everything now from a new roof, new plumbing, a water heater, lots of electrical work, a full bathroom gut, new subfloors, and flooring to come. We are working to elevate this property as a unique stay in Wisconsin.

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

A friend of mine back in November sent me a Robuilt YouTube video, and it was all downhill from there! I follow every STR podcast and Bigger Pockets a sickening amount, and unique stays have been screaming at me since. When I stumbled on a cutie croissant ;) A-frame near a popular destination in Wisconsin I jumped on it.

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

I found via Zillow and with the help of my relator BFF we paid asking but negotiated a new roof in the deal; balancing the expenses and allowing us to still cash flow at a healthy rate.

How did you finance this deal?

I took a HELOC out of my current home equity to finance the 20% down with a second home mortgage.

How did you add value to the deal?

I don't know that I have added value outside of the full renovation that we are undertaking. But through investing in the property with a full renovation. I am confident in my ability to sell the property at a profit if our STR performance falls short.

What was the outcome?

The outcome is TBD. We are adding forced appreciation through the renovations and the property will look unrecognizable when we are done in addition to all of the updated mechanicals. If we are unable to operate at our desired performance as an STR, we could look at selling at a higher price than we purchased.

Lessons learned? Challenges?

READ EVERYTHING. We ran into issues with our roof replacement. We allowed the seller to select the roofer. BIG MISTAKE. We were left scrambling for a new roofer after the original "Low balled offer" laughed at me when I called to schedule the work. Somewhere in the paperwork we signed off on having an A-frame roof replaced within 30 days of closing in January and in Wisconsin... Also if it looks like the seller is doing weird things and purposely covering things in the home, listen to your gut.

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

I did work with CMG Financial Group on financing and they were great.