North Phoenix BRRRR 85032

[Cara Lonsdale]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $188,145
Cash invested: $33,000
Sale price: $1,675

Totally outdated rental property where the previous owner just kept collecting checks, but left alot of deferred maintenance, and rental rates deteriorated to $900-$1,150. We came in an completely gutted this property, did a little reconfiguring, and updated it with nicer finishes. ALL new kitchen with quartz counters and white cabinets. New bath vanities and refinished tub/shower surrounds. All new light fixtures and hardware throughout. New windows, new landscaping in backyard, new sky lights, new roof. See pix at https://727308.wixsite.com/lonsdaleprojects/2515-e-villa-maria-dr

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

I loved this community and it's offerings. This single level with 3 bedrooms, a yard and 2 community pools was a no-brainer! The price point made it appealing for putting in the cash it would take to bring it up to par with a luxury rental within our portfolio.

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

Listed on MLS. This was an investor who held this for years, but kept it in it's original state over the years, and never updated it. The rental rate suffered, and my guess is that this investor thought it was a dud. GOOD NEWS FOR US! We came in with an offer that worked for us, which was accepted. We then asked for a Seller concession for bigger items like the roof and sky lights, which we negotiated as a credit at closing.

How did you finance this deal?

Because our plan was to hold this property, we used conventional financing, and put 25% down to get a more favorable rate.

How did you add value to the deal?

Rentals in this area are suprisingly dirty and not updated. The highest recorded rental rate to that point was $1,550 for a unit that was larger and had a 2 car garage as opposed to our 2 car carport. By updating our property and delivering it sparkling clean, we rented it within days, and were able to get $1,675 per month in the rental rate that used to get $900-$1,150 at it's previous best.

What was the outcome?

We rented the property within days and receive $1,675 per month in rent.

Lessons learned? Challenges?

Getting HOA approval takes time, so make sure you factor that into your rehab time budget. Delays come about when you wait until you are ready to complete that part of the rehab, only to find out that the HOA doesn't meet for another 30 days, and your request is sitting on someone's desk until then. UG!

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

I am a Realtor, so I listed it on MLS and had professional pix taken with virtual staging used.