West Palm Beach, FL- Buy, Renovate, Hold

[Bradley Kesselman]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $111,000
Cash invested: $8,000

ARV; $150,000
Monthly profit: $400
IRR after an 8 yr holding period: 36%

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

I want steady cash flow and a property that would retain it's value even in down times (this property is located in a high end full amenity condo building overlooking the water).

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

I saw this property on the MLS. I knew that I wanted to buy in downtown West Palm Beach. The owner had bought at the height of the boom and had operated it at a loss since then. He was looking to get rid of it.

How did you finance this deal?

Bank Financing.

How did you add value to the deal?

I rehabbed the unit (new flooring, new appliances, new cabinets, new countertops, new HVAC,)

What was the outcome?

It had multiple offers to rent at full ask within one week of being on the market.

The property has positive cash flow of $400/month and the ARV increased by $40k.

Lessons learned? Challenges?

The greatest obstacle was dealing with the Condo Association. In South Florida (Broward County, Palm Beach County etc.) the condo associations and homeowners associations are very powerful. You are basically at their mercy. They can stop your contractors or even bar them from being on site. We call them "condo comandos" and they are a huge impediment to rehabs.

One large lesson I learned is to stay away from condos or homes which have strong/hard to deal with condo boards.