First Rental Property in Omaha, NE!

[Brian Washburn]

Investment Info:

Single-family residence buy & hold investment in Omaha.

Purchase price: $90,000

Cash invested: $41,000

-3BR/1BA. 1900+ Sqft.
-Located near 2 major hospitals and 3 Universities
-Original Rehab included 100% new bathroom, 100% new plumbing in the house, electrical updates, all new flooring, all new paint, and the addition of one new wall to create a "true" 3rd BR.
-Rent = $1,300/Mo

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

I found this property by setting up new listing alerts on the MLS. I received an email the day this house was listed. List price should have been $120-$140K, but the seller was trying to avoid foreclosure. We ended up paying full list price ($90K), but got the seller to put on a new roof.

How did you finance this deal?

Small business loan to our LLC. We put down 25%, and took a loan for the remaining 75%, with a 15 year term and 5.5% interest. Rehab was all paid with cash out-of-pocket. I teamed up with a partner who provided 75% of the money. Since I did the work and manage the property, we split equity 60/40.

How did you add value to the deal?

Every "surface" in the house is new, with new paint, new floors, painted cabinets, new appliances. Completely re-built the bathroom, and replaced all plumbing in the house.

What was the outcome?

Got a great set of tenants and completed the full renovation in 6 weeks (while also welcoming a 2nd child!!). My agent toured the house and said if she were to list it today she would go in at $180K. While I think it would sell closer to $150k, that would still be a $60K increase.

Lessons learned? Challenges?

Lessons Learned:
1.) Home Inspections (while important), can be pretty bad at catching major issues. Don't trust the inspection alone
2.) When the whole house needs interior paint, HIRE IT OUT. The extra cost is worth the immense time savings, and you'll get a more quality result.

MANY other lessons learned, as this was my first deal.

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

Agent: Gina Hodge with BHHS
Lender: Cole Grotsluschen with Frontier Bank

Both were great!

Shout out to @Logan Fast for help with the Lease!