Door No. 5 a Buy and Hold in Fort Worth, Texas

[Jaime Ordonez]

Investment Info:

Single-family residence buy & hold investment in Fort Worth.

Purchase price: $65,000
Cash invested: $53,554

2 BED/1 BATH/ PIER AND BEAM
House Size (sq. ft) 988
Lot Size (sq. ft) 7000
Year Built 1922
Property Type Single Family
Construction Wood
Roofing Shingle
Flooring Types Wood
Wiring Condition Knob and Tube
Plumbing Condition Poor
Siding Material Med
Total Reno $40,000
Plan to REFI in 6 months to recover Cash Investment

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

Our Family has been investing since 2004 and my older brother and I started investing in our own portfolio in 2013. We grew up in a house where my mother retired before age 55 and saw my parents benefit in countless ways from investing in real estate.

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

My partner who is my older brother found it on a real estate facebook group from a wholesaler. The seller focused on wholesale and had no interest in the buy and hold. He left plenty of meat on the bone so it was a win-win-win for everyone. His title company of preference made us uneasy with some of their actions but we are always looking for a title company to add to our preferred list to work with.

How did you finance this deal?

Some of the cash generated from our two duplexes over the past two years was used for the down payment ($13k), we recently refinanced one of those properties which we dedicated $10k towards the renovations, and we borrowed $30k from two private investors for the renovations.

How did you add value to the deal?

I run the numbers, assist with tenant selection, execute the lease, responsible for ensuring our PI's are paid back (w/interest), and because I live an hour a away I went to work at the property once a month for the three month renovation period (1 visit I cleaned the cabinets to prep for painting, 1 visit I put new knobs on all the cabinets and hung the towel bar, toilet paper holder and a mirror in the bathroom, 1 visit I mowed the lawn and helped move trash to the curb for bulk pickup.

What was the outcome?

Successful deal, the fastest complete renovation we have done, found a good contractor to add to the list, developed a system for tenant screening, and enriched the partnerships we have developed. The best part of this deal is it was funded completely by OPM (other people's money) The rental income was the down payment and went towards reno cost, and private money was used for the rest, then after paying everyone back we will have a cash flowing property.

Lessons learned? Challenges?

We took out a six month vacant property insurance policy to cover vandalism and other unforeseen challenges, but finished in three months. Next time we will buy a three month policy to start and add to it, if needed. Also, on the next deal we will try to get more PI's to buy the property cash to execute the BRRRR and get better returns.

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

Insurance: Heritage Risk Advisors (first deal with Kim VERY knowledgeable and fun to work with, will do more business with her)
Tenant Placement: Kanam Realty Group (John has worked with our family either selling houses, showing us houses, etc. for 2 yrs)
Contractor : Buena Fortuna Construction (Juan did a great job and we found him driving 4 $)
Lender :Community National Bank and Trust of Texas (Natalie has been involved with all of our deals and adds so much value to our team