1990 Family Home purchase

[Mike Jacobson]

Investment Info:

Single-family residence buy & hold investment in Rochester.

Purchase price: $93,000
Cash invested: $95,000

Purchased a home for the family while test driving a minivan. Stopped by an open house on the opposite end of town. Told the realtor we were looking for a fixer upper with acreage in the city. She said she has just the property. We purchased the home. Loved the location. Spent $95,000 remodeling, mostly materials as I and co-workers did the remodel. Moved in October 31, 1990.

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

Wanted a house for the growing family. It is on 2.3 acres in the city. It's like a park.

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

Looking for a minivan. Made offers and went back and forth a few times.

How did you finance this deal?

Conventional financing. Then a construction Loan. I estimated $35,000 for remodel. Ended up at $95,000. Bank would give me $5000 at a time. I would bring them receipts for $5,000 and they would give me another $5000.

How did you add value to the deal?

Tore down to the main floor, then rebuilt adding a 2nd floor. Added a 18' X 26' addition on the back side, new windows, siding, doors , roof. Custom built all woodworking in the home.

What was the outcome?

Still here, time for a remodel

Lessons learned? Challenges?

Lots of education serious construction.