My Most Ambitious Hold/Flip, My Biggest Success

[Michael Miller]

Howdy,

I am so happy to report that in October of last year, I purchased a 15k 2.5br 1bath home in a rental area near the local university.  It was the most disgusting house I have ever seen.  My team and I removed every wall board and piece of sub floor to reveal joists and studs.  Eventually, we added another bedroom and bath, bring it to a 3.5bed and 2bath with a laundry closet.  I am so proud to bring this home back to life, and add value to the neighborhood.

Here is how the deal worked out by the numbers:

16,200 : Purchase price w/closing costs

   3,300 : Labor

      500 : Permits and such

13,000 : Materials for all new baths, kitchen, roof, plumbing, electric and roof

Final price of 33k.

I am currently renting it for 1000 monthly, for a cash on cash ROI of 21.5%

Also, I just had it appraised at 55k, and my CMA came out to be 52k, and he assessor, who rates taxable value at 50% of actual value, assessed the property to be worth 26,800 taxable (53,600 actual).  The average among these prices being 53,500.

I may be taking out a HELOC on this for great ROI and room to make another deal.

Final numbers:

33,000 investment

7,100 annual cash-flow / NOI

21.5% cash-on-cash ROI (without leverage) could be above 35% with leverage

21.5% capitalization rate

20,500 capital gains potential

[Michael Miller]

@Neal Collins

The roof was 5500, and the other materials were priced very strategically. My background began with building material sales and blue print takeoffs. I know how to rehab for little (ex. I bought all of the Cabinetry, except for the counter tops, from a secondhand building materials store resulting in a final cost of $480 for all of them, solid oak). I'll try to round up some photos.