Court Street Dud

[David Moore]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $40,900
Cash invested: $2,500

Right now, I'm calling this buy a dud...bought this at $40,900.00 in tight market...my lender came back with higher valuation, and financed nearly entire purchase price. This is my most expensive rehab, now, at 28K plus. This is 2 bed/1 bath house...we put on new roof, pipes for boiler, new heat vents throughout, dual zone heat, laminate on main floor, etc. Was hoping for rental, but got nothing but a string of lousy rental hits, nothing solid. Neighborhood outside my normal zone, and feedback was house is small. Decided to put on market to sell...many upgrades, so hoping for good sale price.

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

We'd been looking for a while, and came across this bank owned property. We looked at it and liked it...got it for about 10K under asking.

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

MLS....we offered 1K over a recently reduced price

How did you finance this deal?

Local lender with whom we finance all our deals. Appraisal came in higher than loan, so our lender financed 95%.

How did you add value to the deal?

Pipes were stripped out, carpet had water damage...we removed super heavy old radiators and had our plumber put in modern fin based hot water heat registers. We painted entire interior, some exterior front (mostly vinyl siding). Had roof tearoff and replace. We also found old pipes that went from basement boiler to heat registered were covered with asbestos. Asbestos removal mean pipe removal, meaning pipe replacement. Also redid bathroom with new toilet, vanity, light, paint, and shower

What was the outcome?

We wanted it for a rental, but the rental market was terrible for a 2 bedroom in this location. We decided to sell it...still prepping for sale

Lessons learned? Challenges?

If I see radiators in a house again, I'm either severly cutting my offer, or walking away. Airflow in radiator heated homes is negligible.
There was a lot of unseen damage. Definitely wish I had not bought this one.

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

Matt Johnson Leland Realty is our agent...he is outstanding on every level. Jim and Dudes plumbing and heating prioritized my project due to long term relationship. Their work is fantastic. Thompson electric outstanding work. My handyman Tim is top notch. I have a great team.