4 bed 2 bath single family home with 2900 sq ft of living space. This home required a complete remodel including updated electrical, new plumbing, hvac, new floors, exterior and interior painting, and some landscaping work. This was my first deal and I learned a lot about the rehab process and sourcing for tenants. Tenant is currently on a 1 year lease.

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

The original intent of buying this property was to fix it up in order to do a seller finance deal with my sister and brother-n-law. It had a lot of living space, located on a corner lot in a C neighborhood, and I was familiar with the area.

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

I found this deal on the MLS. It had been listed for over 90 days with a recent price drop from $25,000 to $19,990. I originally offered the seller $12,000 site unseen. They countered at $17,500 in which I declined. They also mentioned that they had another buyer interested in the property. I made a final offer of $15,000 in which they accepted.

How did you finance this deal?

I paid cash that I received from a cash-out refi of my primary residence to buy the property. I used credit cards and personal loans to finance the cost of repairs.

How did you add value to the deal?

I updated the electrical, plumbing, hvac, new floors, interior and exterior painting, new appliances, and some dry wall repairs. The rehab increased the value to $71,000

What was the outcome?

Well needless to say, my sister and brother-n-law were not able to complete their end of the deal which included helping with some of the rehab work and paying the original rent of $650.00. I rented the property to another family 7 months after purchasing it and completing the rehab for $800.00 per month. I refinanced some of the personal debt I used to do the rehab with the bank that I had my primary mortgage with 10 months after I bought it.

Lessons learned? Challenges?

The lessons I learned from this deal included:
-Get an inspection from a licensed individual if buying out of state.
-Used licensed GCs which hiring for large rehabs
-Aim to buy properties with an ARV of $75,000 or higher to ensure that LTV will meet most lenders minimum loan amount of $50,000
-Have a backup plan if planning to rent/partner with family members