Finding success in small town investing

[Brandon Taylor]

Investment Info:

Single-family residence buy & hold investment in Milford.

Purchase price: $115,000
Cash invested: $60,000
Sale price: $235,000

2/1 Single-Family Investment Property

Located in an area primed for revitalization, I purchased this 1915 home for $120k, with an “as-is” appraisal of $186k. The house had a unique layout, with the kitchen and bathroom added later. Initially, I planned to finish the attic, add a bathroom and bedroom, and create a first-floor master suite, turning it into a 3/2. However, after reflection, I realized I was becoming too emotionally attached to my first investment after a 15-year break and faced challenges finding reliable contractors.

Update (5/17/23):
After three failed contractor attempts, I finally secured a reliable one. The plan was to complete flooring, electrical upgrades, new kitchen and bathroom, exterior fascia work, and some new windows, with a target listing date of June 15th.

Update (5/12/24):
The property has been stabilized since June 1st of the previous year with great tenants in place. It generates positive cash flow of around $600/month after expenses. Key lessons learned: use a cost-per-square-foot estimate from previous projects rather than relying solely on GC quotes, as they often underbid but end up costing more in the long run.

The property is under a 2-year lease at $1,750/month.

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

I'm looking to buy back my time.

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

MLS - it was overpriced for the condition it was in. I let it sit for 4 months before I decided to make what I considered a reasonable offer.

How did you finance this deal?

Hard money loan

How did you add value to the deal?

New windows and doors, new kitchen, updated bathroom, new HVAC, new flooring and paint and finished the attic with flooring and heating/cooling.

What was the outcome?

Property was appraised at $239k. Property is rented for $1750 per month. Monthly mortgage with insurance and taxes is $924. I self manage this property.

Lessons learned? Challenges?

Early on I replied on various contractors (unsuccessfully) due to my (then) full time, very time consuming job. Since then, I've learned more into my build, design and project management skills, taken everything in house, gotten my GC license and taken a more hands on approach. I realized that this isn't "passive" at all and success can be the difference in knowing what's going on and being aloof.

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

Absolutely not ;-(