West DSM Live in Flip

[Michael Peters]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $189,000
Cash invested: $20,000

Purchased a Property in 2019 with zero down and completed a live in flip over the next 1.5 years. Updated the entire property while house hacking with 2-3 roommates. Post rehab refinanced the property and was able to wipe out my PMI and Closing Costs with the forced appreciation. Brining in over $700 after my mortgage and insurance with minimal maintenance required thanks to the extensive rehab.

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

At this point in my career I had been working in property management for a few years with the express intend of learning the processes to start my rental portfolio.

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

Using my connects in my company I was able to locate an off market deal that had the right type of updates. We shaved 3K off the purchase price, split closing costs, and received a 1 year home warranty, which I used to great effect, with this purchase.

How did you finance this deal?

Zero down with a local credit union. Walked away with a check at closing.

How did you add value to the deal?

New trim, doors, paint, electrical, fixtures, refinished/replaced flooring, refinished cabinets, new appliances, revamped the entire landscaping for improved usage and curb appeal, and completely gutted and remodeled the basement bathroom.

What was the outcome?

Refinanced the property prior to renting wiping out my closing costs and PMI. Currently have roughly $70K in equity, mortgage $1,115 and rents $1,930.

Lessons learned? Challenges?

Self taught rehabber who learned everything takes longer then expected, but am more prepared and excited for the next rehab. Learning small things about what I would opt to hire out in the future or steering towards painting cabinets vs refinishing. Since I was already in the PM world tenants and managing were already a simple affair to add to my plate.

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

Yes, worked with an agent at my company, who also happened to be my sister-in-law. Since then I have obtained my own license to help others locate their future homes and to give myself more flexibility in my next home purchase.