5th rental property purchase but 1st rehab!

[Chris Webb]

We already own 4 rental properties but decided to dip our toes into a rehab project. In my area, it is hard to find good flip properties (Raleigh, NC). Besides, I'm a big fan on buy and hold (at least for a 5-7 year period). As a licensed broker, I was able to use my MLS access to source a fixer upper. We purchased for $142,000 with a tax value (as is) of $168,000. Not a huge delta but for a first rehab, the numbers worked out. We were able to purchase with 100% financing due to the fact that our primary residence is in my name only so we put the new property in my wife's name (we are going to re-finance as a rental property in the next 12 months since the appraisal value will be high enough to carry an 80% LTV. Anyways, we put 20k into renovations with all new kitchen cabinets, new vinyl plank flooring, new interior and exterior paint, all new bath vanities, toilets, new windows, new glass sliding doors, basically everything is new except the carpet. The 30 year old home had all wood stained doors, baseboards, trim, original cabinets, original everything!

Purchase price: $142k

Capital outlay (renovations ) $20k

Time to rent property - less than 24 hours once it was put on the market

Monthly cash flow - $465

Hold period - 5 years

Total ROI (assume normal vacancy loss and maintenance expenses with little appreciation - 280%

 Sink and backsplash was installed after this pic below.