Property #2: 2023 Brick row home purchase and renovation

[Frank Del Corso]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $122,500
Cash invested: $55,000

3 bed 1 bath Brick row, needed new floors, paint, windows, roof, deck, water heater, doors, lighting. The reno took a bit longer than expected but it went pretty smoothly.

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

The current owner wasn't interested in being a land lord any more and the numbers worked. I also know the area well and know it is a good location.

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

The owner was the lawyer for the owner of the first property I purchased and renovated in the area. I kept in touch with him and found out he owned a property with his ex-wife and did not want to be a landlord any more.

How did you finance this deal?

20% down payment and a commercial 5 year ARM @5.25%

How did you add value to the deal?

We totally renovated this property from top to bottom. New roof, windows entry doors, deck, flooring, paint, hot water heater, lighting, ceilings, kitchen and bath. When we bought it the tenant had turned off the water to the bathroom sink because of a leak, which caused the kitchen ceiling to fall. The interior walls had yellowed from the tenant smoking, the kitchen light was broken as well as the glass in the backdoor and several windows.

What was the outcome?

The renovations took 6 months and it turned out great. The idea was to modernize the property and make it so that we would want to live there ourselves.

Lessons learned? Challenges?

The person I hired to do most of the work inside was in over his head and is a bit scattered so for my next property I will use him for what he's good at, carpentry, dry wall, and handyman work. I will also make sure all of my contractors are licensed in the city because my deck guy was not and so I had to keep following up with him to get that done. This delayed the project and cost me a month's rent.

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

Embassy bank has a great commercial lending program.