Raleigh 3bd/1.5ba ranch in the Northclift neighborhood

[Account Closed]

Investment Info:

Single-family residence buy & hold investment in Raleigh.

Purchase price: $192,500
Cash invested: $20,000

3bd/1.5ba in the Northclift neighborhood of Raleigh. Fully renovated Kitchen

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

This was a house that needed some work but is in a great location in Raleigh. Had some immediate equity on the purchase, and is in a good location for the potential of strong appreciation.

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

MLS, listed at $200k. Offered $190k, they countered at $197k. I came back at $192,500 and asked for closing costs. They accepted here.

How did you finance this deal?

SECU 100% financing for a personal residence on a 5 yr ARM at 4.25%. Refinanced after a few months into a traditional 30 year at 4.25%. There was 3.5% equity already, so only paid closing costs. Just to clarify, I moved in and lived here for 2 years while fixing up. This was my primary residence for the 2 years.

How did you add value to the deal?

Remodeled the kitchen, changed out the blinds and lights. Changed a couple of the interior doors that were in bad shape, and one exterior door.

What was the outcome?

Appraised in early 2019 for $250,000. This dropped PMI from the loan. Moved out in August, 2019 and rented at $1500/mo. Currently have a property manager for 1 year, may go without one next year because of the tight cash flow.

Lessons learned? Challenges?

So many lessons learned here. I was fortunate to talk with a friend who's a flipper, and he helped me get in touch with some good sub contractors to renovate the kitchen. This saved me so much money on the rehab and helped me understand what fair prices should be for materials and labor.

This is a house built in 1967, apparently this neighborhood was built during the 60s and 70s with aluminum wiring. Had some issues getting insurance because of this, but Farm Bureau insured it.

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

Mallory Hedden, Realtor
Matt Perry, Realtor