First Renovation + Hold

[Christopher Reeder]

Investment Info:

Single-family residence buy & hold investment in Winter Haven.

Purchase price: $68,500
Cash invested: $20,000

3/2 block home in an established neighborhood. Prior owner had trashed the property. This was our first renovation project to get to rent-ready condition.

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

Market for property was very thin in 2016. This was a property that had potential, but needed work to present well.

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

MLS. The market was hot and negotiation with foreclosures was not easy. We were in a bidding war with another buyer but were able to secure the property slightly over asking price.

How did you add value to the deal?

Ask this was our first property requiring extensive renovation, I took the opportunity to open the floor plan up. We combined the kitchen, dining and living area into 1 shared, open space concept. Completely new kitchen, doors, flooring and paint for interior and exterior brought this back to life.

What was the outcome?

Renovation went well. Contractor did a good job, but took longer than I expected. The next door neighbor saw our work and came over several times during the renovation to inspect what we were doing. They new the prior condition of the property before we took ownership. In the end, the wife told her husband they should do the same work on their home which is the mirror layout as the one I bought. They loved the open layout we developed.

Lessons learned? Challenges?

Set a firm timetable with your contractor and incentivize him/her financially if they beat your agreed timeline. This will help your project stay on track and enable you to get a tenant in the property to begin your cashflows.