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Updated almost 6 years ago,
1966 SFH that needs work, won on bid by court ordered sale
Investment Info:
Single-family residence buy & hold investment in Garner.
Purchase price: $160,000
Cash invested: $160,000
SFH that was a court ordered sale. Couple split up. Wife stayed and trashed the house. Needs deep cleaning, debris removal from yard, kitchen remodel, and assorted other work. ARV will be 230,000.
What made you interested in investing in this type of deal?
This house was 5 minutes from our home and across the street from the just completed elementary school remodel. I’m a nice small neighborhood on a quiet street with good access and egress.
How did you find this deal and how did you negotiate it?
My realtor contacted me with it. It was listed on MLS for WELL below market. Everyone in Wake County viewer this house since it was priced so low but most were turned off by the work required.
How did you finance this deal?
All cash from investment funds.
How did you add value to the deal?
Other than some electrical work it will need we will self perform all needed work with our internal crew.
What was the outcome?
House was just closed. We are waiting to start work in a couple of weeks. This will be a several month restoration.
Lessons learned? Challenges?
We expected to be upset on our bid which would be 5% higher than our 160k bid. We still made money if we upset the upset so we were comfortable with our numbers. When we didn’t get upset, we got nervous that we’d missed something. In talking to other bidders after, they couldn’t make their numbers work.
However we are buying and holding so our numbers were based on rental rates, not flips. Others were not looking at a simple add to add a 5th bedroom. That is about 400 per month more rent.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Jane Ball of Be Home Realty. She started and finished the deal, and provided all the numbers. My research after the fact showed he to be spot on.