Finally closed the loop on #1.....$1k+ cash flow and appraisal 42% above cost

[John D.]

Im psyched to finally have closed the loop on my first property from purchase, renovation, tenant in place, appraisal, and now finally pulling cash out to finance future deals.

I "won" the hubzu auction on 3/15 for $134k. 1750 SF 2 bed 1.5 bath on 3/4 acre in north Nevada City CA. With fees etc. it came to $142k purchase price as listed on the HUD1. We closed on 4/7.

It took my guys just over 3 weeks, to add an unofficial 3rd bedroom, paint the place head to toe, redo half the flooring (home depot allure flooring at $.99 i'm a huge fan), take care of a bunch of exterior maintenance issues, put in new appliances, do some minor kitchen work, replace the hot water heater, couple of other small things. Total rehab cost of about $13k, plus $3k in appliances.

So total out of pocket cost right about $160k total with inspections and some random stuff.

I had her rented basically the day they finished renovating on 5/1 at $2500 per month.

Just got the appraisal back and she came in at a $230k appraisal.

Next week I wrap up taking out a loan out for ($230k * .75%) $172.5k and use that to finance a future deal.

With that loan secured at 75% LTV, she'll cash flow at north of $1,000 per month, and I'm up $70k or 44% on paper based on the appraisal value compared to what I put in.

-----

Onwards and upwards! Property #2 is rented starting tomorrow and will get appraised next week -- I'll share those numbers as they come in, cash flow looks a little stronger and appraisal value to cost as a percentage a little lower, but still looking great on paper.

------

Wish there were more REO auction and related properties still out there......I'm not sure if I'll find many in the future as good as these first two!! Properties #3 - #7 will cash flow well but I won't get anywhere near the same appraisial above cost or appreciation.