First thought House Hack now possibly sell

[Keith Thomas]

Investment Info:

Other other investment.

Purchase price: $375,000
Cash invested: $65,000

I have bought my first foreclosure and my first taste of a VA-Rehab all in one in Auburn, WA. I got the property just last year for 375k. It was a 3bed 3bath 3184 square feet with a daylight basement. So I noticed that there were 3beds upstairs and 2 baths. Downstairs had 2 big rooms 15 x 15 each with closets and 9x 10 spare room for and office and a 3.75 bathroom and a generous dining / living room area that was 27x23.
So my mind said I can turn this into a rental / house hack and live upstairs basically rent free. I put in a kitchen and added another bathroom in one of the bedrooms and could rent the master for 1k and the second bedroom for 850. Although still in progress since its a daylight basement one of the rooms I need an egress window. So all in so far I'm in 50k with VA Rehab and about 15k out of pocket and at least another 20k to finish everything up. I spoke with the real estate agent who I've my last 2 deals with and he said he would put the house on the market for 700k. I thought he was reaching for the moon, but because of income property and the neighborhood he said you should have no problem especially since you have everything permitted. He is also in the process of learning how to work with investor's as well so we are kind of learning together. But the real question is to sell and look at the bigger picture of having some capital under my belt for eventually buying an apartment building or do a Cash out Refi and keep the house to avoid capital gains? Or am I completely missing the boat. This is my first time posting. Any Input would be helpful

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

Listening to podcast and seeing this property was listed wrong so I saw hidden opportunity. So I figured a great House Hack in Washington. With a legally permitted ADU everything should work out just fine. Never thought that I would sell this place until the realtor mentioned 700k so I am willing to test the market when I'm 100% done. I have another 20k to put in. So I am always looking for hidden gems due to the prices are a little high in this area and me being new and trying to build capital.

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

This was on the MLS, it was listed for about 515k in horrible condition. So I just waited and the price started to come down. I made an offer at 425k they refused. So it got to 390k someone else bought it. My realtor and I were disappointed and I said back to looking. Then 2 weeks later came back on the market and I offered 370k and it was a little bidding war and my final offer was 375k and I got it.

How did you finance this deal?

I used a VA Rehab loan. 0 down

How did you add value to the deal?

I added new flooring , Paint new electrical panel , changed all plumbing fixtures, and a new bathroom downstairs and put in a brand new kitchen. Added a Tankless water heater. I still have quiet a bit left to get down Landscaping, new decks and paint the exterior.

What was the outcome?

Well So far it looks great. A lot of compliments I will try and post pics if I get this all figured out.

Lessons learned? Challenges?

Relying on contractors to show up. Realizing that if you are not familiar with rehab's they will charge you a lot of money. A good Handyman is Priceless. Completing the home before you began and sticking with your plan.

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

I did work with someone but I am a little hesitant to just put his name on here without permission.