Value add single family home (first mortgage)

[Salvador Rodriguez]

Investment Info:

Single-family residence buy & hold investment in New Castle.

Purchase price: $135,000
Cash invested: $25,000

Single-family home, my second rental property. Decided to buy this home with a mortgage to see what it was like if I'm completely honest. Finished the basement and added three rooms and a full bathroom making it a 5 room/ 2 full bath property. New electric throughout the house, plumbing, AC/Heat sys. New bathroom and paint upstairs.

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

I liked that the property had an unfinished basement. My original plan was to split the property and have two tenants, one upstairs and one downstairs but decided to add rooms instead. The property is close to another rental I own and thought it would be easier to manage them since I am new to this business.

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

I found the deal on zillow and a real estate agent assisted in negotiating the price. The property was an REO and we were able to lower the price through negotiations.

How did you finance this deal?

Mortgage 20% down 30 year.

How did you add value to the deal?

We added three rooms in the basement and a full bathroom.

What was the outcome?

I was able to add value to the property and learned a few things along the way.

Lessons learned? Challenges?

10 days after closing on the property someone broke into our basement and cut wires from our electrical box (for the copper). I had to contact my insurance and luckily they covered enough to redo the electrical wiring throughout the entire house.

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

Norma Ocampo Remax (West Grove, PA)