Cosmetic rehab (paint, carpet, appliances) which I did myself over Christmas vacation. Listed for rent 7 days after purchase. Rented for $1300 after 4 DOM. Tenant pays utilities, condo fee covers maintenance.

Started the refinance process upon lease signing. Condo was purchased with cash using a HELOC at 4.1%, interest only.

Appraised at $141k (my pro forma was $130k so this was a nice surprise). One local bank offered 80% ARV while 9 others were at 75%. $110k mortgage, 5.25%, 30-year fixed. After closing costs, I walked away with a check for $106k leaving a $1.5k cash investment and $31k in equity.

Cash flow is $175/month with another $130/month going into reserves. Cash on cash return is 143% and the payback period is 9 months.
Purchase date: 12/27/2018. Refinance date: 3/13/2019

Couldn't have asked for a better first deal and thanks to BP for the confidence to pull the trigger!

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

I've only lived in condos and I'm comfortable with them. This property is an hour from where I live so I'm happy to pay a condo fee to cover maintenance and not having to use a property manager (for now at least).

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

Listed on HUD Homestore. Listed for $121k, then dropped to $108.9k. Bid was accepted at 90% of list price. My brokerage registered with HUD as a bidder and saved 3%. Purchased as is for cash with a 30-day close per HUD rules.

How did you finance this deal?

Cash purchase using a HELOC on my primary residence. Credit card for most of the rehab with appliances and carpeting purchased from Home Depot.

How did you add value to the deal?

HUD Homes are vacant so I accessed it during my inspection period which allowed me to take measurements, order appliances and determine the scope of rehab so work could begin on closing day. Being able to list it for rent myself and not having to pay 3% buyer's fee saved money.

What was the outcome?

Cashed out all but $1500 and now I have a nice cash flowing property with high-quality tenants.

Lessons learned? Challenges?

The biggest challenge was getting the property inspected. HUD did not let me turn on the water so could only do a pressure check. And had to jump through several hoops to get them to allow me to turn on and test the electricity. The property was vacant for 7 years so the electric meter had been removed. The biggest lesson learned: tell everyone what you're doing. Got so many money saving/money making tips from random people along the way.

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

Yes, a great local lender who understands investment properties. Message me for the name. Also, Greg H. from BP has great HUD content that helped a ton. And BP podcasts and BRRRR calculator built my confidence.