Akron Single Family Buy & Hold (Live in)

[Sean Brauneller]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $151,500
Cash invested: $8,235

Contributors:
Frank Ruma

3 bed/ 2 bath ranch, attached 2 car garage, finished basement, fireplace, nice backyard. We had to move to Akron for my job, wanted a fixer upper, but not total rehab. Having fun with some customizations. Putting in a new patio door, new kitchen, bath, and refinishing hardwood floors.

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

We had to move to Akron and was looking for a fixer upper, something we could customize for our benefit. And, plan to rent out as a single family home after we retire.

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

MLS. House was on the market for close to 6 months. The wife liked the layout and I liked the location. The house is only about 1500 square feet, so it was manageable. Location is good. It's out of the city, not in the high end neighborhood. Rents should be average to high and stable. Working class neighborhood.

How did you finance this deal?

conventional, primary residence, 5% down.

How did you add value to the deal?

rehab drywall, electric in DR, LR, Kitchen $13K. New Roof, gutters, soffits, lighting, $22K. Bath 5K, refinished flooring $4k. Backyard deck, tree trimming, fence, fire pit, $8K. Masonry, patio door, well & foundation $6500. Included in the rehab numbers are new water heater, moving pressure tank, removing back door/porch. The only wild card is the furnace. Furnace is about 12 years old, but AC is only 2 years old. Capex and Maintenance should be low when we begin to rent out.

What was the outcome?

Total invested is about $55-$60K. This is our primary residence until we retire. The rehab is mostly sweat equity, hiring the drywall and mason work. We are doing the rest ourselves. We always have Plan A and Plan B. Plan A is to live in as primary residence. Plan B is to rent. Rent should generate $200 - $300 /mth. Plan C would be to flip.

Lessons learned? Challenges?

We should have bid lower. My thought was to offer lower than asking ($25K), but above what the flippers would ask. The deal was accepted within 24 hours. No other negotiating. I should have done my homework (in my opinion). I think I could have gotten it for about $10K cheaper. Hind site is 20/20.

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

very happy to work with Frank Ruma, Keller Williams