First Deal Complete

[Brett Socha]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $180,000

Here’s our first deal. We called it the Rattler Rehab as it is on Rattler Lane.

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

We are wanting to build a rental portfolio over the next couple of years. We decided to go with this one since it was in our area and would be a good opportunity to learn the ropes of buying, rehabbing, and renting.

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

I found the deal by calling bandit signs all around town and building relationships with wholesalers. The purchase price was substantially lower than the ARV.

How did you finance this deal?

We used a private money lender and a hard money loan. Our exit strategy is going to be a cash-out refi.

How did you add value to the deal?

This property was in bad shape cosmetically. We had to replace almost all drywall. We also replaced the carpet in the living room with LVP and installed a new carpet in the bedrooms. We replaced all the light fixtures with a more modern style.

What was the outcome?

The rehab came in on time and on budget. It was rented within 8 days of listing it.

Lessons learned? Challenges?

The biggest lesson we learned was that we need to get lien wavier from all of our contractors. This would have saved us time on the back end. A significant challenge that we had was that due to the area and the market labor is much higher than other areas we have looked at.

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

We worked with Next Legacy Lending. They are a mortgage brokerage in Texas. They did a great on for us and we will be using them for the foreseeable future.