Ideal farm area SFH MLS deal. Perfect location for our group investors. Retired couple downsizing from home they raised their family in. Well maintained just not updated. 3 investors, cash deal. Secured a private lendor, interest only loan. We emphasized high end updates but our ARV was not met. Primarily due to rate hikes (compounded by the lack of an adequate exit strategy) and subsequent market change but also exceeding our preliminary budget.

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

Absolutely gorgeous property just needing modern updates. Ideal location with a fair market price. Extremely close project for all involved. Numbers worked for a slightly above collective minimum ROI.

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

MLS listing that we offered asking price plus no contingencies and remaining clear out of property post move.

How did you finance this deal?

This particular deal was an all cash purchase. I provided an up front $10000 earnest money payment and then secured a monthly interest only loan with principal being paid upon final sale.

How did you add value to the deal?

All materials were ordered and purchased (with delivery and pick ups coordinated) through me along with all contractor payments. I facilitated investor communication through Google Sheets along with collecting payments for reimbursement. Contractor coordination and task timelines were designed and scheduled through me. Snow removal was performed by my two sons ages 10 and 13.

What was the outcome?

We missed our ARV enough to make this project not profitable. The calamity of the real estate market from the Fed interest rate hikes in 2022 affected us just like everyone else. The silver lining become that we were able to make concessions and still break even. We transformed the house into a beautiful home and became more efficient with our systems.

Lessons learned? Challenges?

We overlooked a detached garage (major turnoff for buyers in our price range) and a chimney which required significant exterior and interior work (to the tune of $6000) that was found on inspection. Our group also did not prioritize exterior work other than landscaping/curb appeal. The roof on this property was over 8 yrs old and the buyers insisted on a new roof with a contractor of their choice (to the tune of $14000 vs $9000).