1st Investment Coming to a Close

[Michael Pachuilo]

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $42,500
Cash invested: $30,000

3-1 1600sf in a low income but low crime area of KCMO that is currently a hotspot for REIs.
Personally rehabbed 2 of the 3 bedrooms with $5K out-of-pocket cash. I have since secured a GC to finalize the remainder of the rehab for the cost of $25K. I secured a personal loan for labor costs and a Home Depot credit card for material purchases. Both are %8-9 APR but I will quickly cash-out refi once the rehab is complete in 1-2 weeks so I've only had to make 2 payments on each loan thus far.
Rehab includes:
Full Bath Remodel
Full Kitchen Remodel w/ butcher block countertops
New Furnace
Added Central A/C
Updated Electrical
Updated Plumbing
Refinishing of original hardwood floors
Interior paint and trim
Exterior patch and paint
Roof was only 4 years old a time of purchase and foundation is solid.
Purchase Price: $42.5K
Rehab Cost: $30K
Total: $72.5
Comps: $90-140K (Average $115K)
Potential Profit: $42.5K
Final decision on whether to sell or rent will depend on appraisal.
Photos will be uploaded within 1-2 weeks once complete.

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

Ian Reeves

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

Searched the MLS for 3 months running the numbers until I found this one which worked financially considering the ARV and rental rates for the area.

How did you finance this deal?

FHA loan.

How did you add value to the deal?

Rehab includes:
Full Bath Remodel
Full Kitchen Remodel w/ butcher block countertops
Removed wall between kitchen and dining room
New Furnace
Added Central A/C unit
Updated Electrical
Updated Plumbing
Refinishing of original hardwood floors
Interior paint and trim
Exterior patch and paint
Roof was only 4 years old at time of purchase and foundation is solid.

What was the outcome?

Still in progress.

Lessons learned? Challenges?

The entire process has been a lesson but here are some of my key takeaways.
I purchased this property sight-unseen.

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

Joy Stamps