Where it all started! 1st Partnered Project

[AJ Shepard]

Investment Info:

Single-family residence buy & hold investment in Portland.

Purchase price: $132,000
Cash invested: $15,000

Contributors:
Chris Shepard

This was the first project that my brother and I did together. This is where it all started for us. I think I have some pictures of us both actually working and demoing out a floor somewhere. We've come a long way in 10 years, but it's been all worth it.

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

We saw that housing prices had dropped if not to an all time low very close as well as financing. One of our goals, which many may not think about, was to obtain as much debt as possible in as quick amount of time. Granted, we wanted it to be good, working debt. Still is a goal that we think about today.

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

MLS - Bank owned property at the time.

How did you finance this deal?

Bank of DAD for purchase, our finances for rehab. Refinance afterward pay Bank of DAD off.

How did you add value to the deal?

The utility room in the back was huge, way bigger than needed. It was bordered by one of the bedrooms and door to the kitchen. We cut it in half and turned 1/2 into a master bath for the bed and then the other half for a normal size utility room.

What was the outcome?

Great value ad, appraisal came in for 195k and we pulled most if not all of our money out of the deal. I am closing on a new refinance for it this week actually, appraisal came in at 340k and our debt owed on the property was about 100k. We've already got the funds earmarked for another deal we are now in contract for.

Lessons learned? Challenges?

Getting in and getting your hands dirty can make you appreciate how the work needs to get done, as well it doesn't allow contractors to pull the wool over your eyes. If you know how long it should take because you have done it before, you are able to negotiate a lot better.

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

Eric Martinez as a broker on the buy side and Guild mortgage for the lending at the time. New lender is Liz Soucie with Fairway Mortgage.