First Deal Done! Single family foreclosure rehab

[Michael Varela]

Investment Info:

Single-family residence buy & hold investment in Old Saybrook.

Purchase price: $200,000
Cash invested: $50,000

Single family value-add foreclosure for rental property in highly desired location. Buy & hold to leverage BRRRR strategy to continue to grow portfolio.

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

Single family value-add deals are available in the Connecticut area I am buying in, and they provide good returns for small investors that might not be in a position to compete with multi-family investors.

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

Walking my dog through different neighborhoods near me, and found a distressed property. I spoke to one of the neighbors and they mentioned that the previous owners just left and the property was in foreclosure.

How did you finance this deal?

conventional loan, 10% down, no PMI

How did you add value to the deal?

Gutted living room, kitchen, two bathrooms, and master bath to provide updated floor pan. House was poorly configured with multiple additions and never properly laid out. Open floor plan with raised ceilings, new kitchen, bathrooms, and master bed.

What was the outcome?

currently rehabbing, ready for drywall. estimated to receive $2400 monthly rent in highly desired area. mortgage, taxes, insurance, and expenses estimated $1500. estimated $900 cash flow per month

Lessons learned? Challenges?

Be diligent with estimating extent of rehab and budgeting rehab costs.