Aaahhhhh Flood Property

[Jared Shoemaker]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Nescopeck.

Purchase price: $40,000
Cash invested: $32,000

Now Nice duplex 2-2 bed 1 bath. 2 car garage. Large yard

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

Had good potential. Close to home.

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

MLS. Was inherited from a brother of the seller and they just wanted it gone. Ran my numbers and started embarrassing low. They just wanted it gone.

How did you finance this deal?

Bank financing. Used the equity out of a sfh for the down payment. Bank loaned me $$ for the remodel then got it appraised and they released the sfh.

How did you add value to the deal?

In the upper unit Added a washer/dryer. New countertops. New bathroom. And some new flooring. Completely gutted to the studs the downstairs apartment. New everything.

What was the outcome?

Still own. Nice area easily rentable. Dropped the flood insurance I was purchasing after the flood because it over doubled from when I first purchased it.

Lessons learned? Challenges?

I purchased this property and planned on mostly cosmetic work. I started remodeling the upper unit first. Well I’m glad I did be 2 weeks after closing we got record floods and this property got 7” of water in the first floor. So there went my cosmetic rehab! When the bank did the flood search it came up as flood zone x which doesn’t require flood insurance. So NEVER buy anything that has a chance of flooding DEFINITELY not worth the head ache!!