We are buy and hold investors, so my husband and I are particular about craftsmanship and reno choices. We both enjoy taking a home and reenvisioning it functionally and aesthetically. We decided it might be better to get a fixer and have everything how we like it rather than buy move-in ready.

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

Hud Home Foreclosure. It sat on the market for a while because the house was in rough shape and had a tiny yard. We decided on our deal number and made an offer about 15% off asking price. Rejected. We moved on but got a call two weeks later from our Realtor, "You're under contract!". What?? Turns out she checked a box with HUD that allowed the the offer to stand until canceled. Luckily we had not found another property yet, so it was a happy accident.

How did you finance this deal?

Cash and credit. We had money saved that allowed us to buy for cash and to renovate for mostly cash. We went over budget by a few thousand dollars (Electrical and HVAC surprises. A few opportunities to get a lot of value from small upgrades like bathroom tile and adding a closet.) We put that amount on a 0% credit card offer, made monthly payments from cashflow and paid it off before the 0% ran out.

How did you add value to the deal?

Renovated kitchen and added a dishwasher. Renovated bathroom, removing yellowed and leaking shower liner and replaced with tile. upgraded bathroom flooring from sheet vinyl to herringbone wood-look tile. Removed passthrough door between bedrooms, allowing us to take that underutilized space to add a 2nd closet to both bedrooms.

What was the outcome?

Exactly what we hoped for. Appealing low maintenance rental that rents quickly. 25% equity above the cash we put in. Went over budget by a few thousand, but got a great product.

Lessons learned? Challenges?

One lesson learned is to incentivize contractors to adhere to their promised timetables. We were delayed for 3 weeks by a slow sub-contractor. He was money sensitive so I think we could have had more prompt service if he was going to lose money from passing deadlines. Also dealt with my first contractor who didn't want to listen to me (female), but reacted much more promptly when I had my husband repeat my concerns and requests. We won't be using him again, ever.