Taking Care of Mom

[Richard Trayer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $372,500
Cash invested: $240,000

This was a custom remodel for Mom. She now owns a SINGLE level 4bed / 2bath / 2car garage... with a nice low maintenance yard and a separate entry for her piano studio. Property comps at around $800,000. We refinanced a mortgage at the right time to put her in a secure and manageable position.

-Leveraged with HML and paid for reno out of pocket.
- $240k cash invested,
- refinanced $250k 30yr term @ 3%
- Property is $800k value today

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

This property came through my brokerage and as they say... it was all about location.
Less than a mile from the home where Mom was living and had raised the family, nursed our Dad until his death ( F-@& cancer), and built her community of peers. This property was an ideal opportunity to downsize/transition from 3000sf 5/3/3 Tri-Level.

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

This property came through my brokerage (NetWorth Realty of Phoenix) As soon as my colleague brought this one up, I jumped on it.

How did you finance this deal?

I used a Hard Money Loan @ 10% and 2points origination

How did you add value to the deal?

Full gut remodel. Full Redesign
Kitchen, Master Bath & Closet, Laundry/Utility. I reworked 3 of 4 bedrooms
(beside the Master, bedroom 2 converted to a Piano Studio with separate ext. entry, bedroom 4 to a Playroom with direct ext, access to side yard - playground)
Eliminated soffits. Updated hVAC lines (insulated flex duct), built a raised Garden (later adding a shed pulled from an other project 5 doors away that I acquired and sold Wholesale).

What was the outcome?

Mom will be comfortable for the rest of her years.
She can work from home, host family get togethers, and avoid taking stairs every day.
Also..
Split Floor plan 4/2/2

Lessons learned? Challenges?

Do your best to find good qualified help. If you find a trusted Project Manager, take good care of them.

I was let down by the one I initially trusted to be on the job daily. He wasn't there frequently enough, left a solo work hand to do the work most days, and refused to bring on more of a crew. The project took much longer than expected, causing holding costs to factor double what they should have. It was tough to kick him from the job. He was a family friend, a pallbearer for Dad.

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

I am a Real Estate Professional and I carry an MLO license... others could work with me.