NW OKC Buy and Hold Rental

[Cassi Justiz]

Investment Info:

Single-family residence buy & hold investment in Oklahoma City.

Purchase price: $115,000
Cash invested: $43,000

Buy and Hold rental in NW OKC. We did a partial cosmetic remodel, plus some electrical and plumbing work.

The rehab budget got blown completely out of the water by "surprises" but that's half of the fun of any good learning experience, isn't it?

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

We knew the neighborhood because several friends lived there and it wasn't too far from our home. We liked the house because it was a little ugly to begin with, but had a good layout and several of the major upgrades had already been done.

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

This was an MLS deal we purchased before I was a licensed agent. We offered about 10k under list price and got rejected. A few weeks later they called our Realtor back to see if we would still consider purchasing it.

How did you finance this deal?

Conventional financing with 20% down. Rehab was financed out of pocket.

How did you add value to the deal?

Cosmetic make-ready.
Full paint and flooring (including removing some wall paper and glued down laminate flooring), patched holes in walls, replaced cabinet doors that were missing, replaced a few lighting fixtures, reconfigured closets that were missing hardware, cleaned up back yard.

What was the outcome?

It was our first rehab and it took about 3x longer and 3x more money than we were expecting. (We had budgeted $5k and 2 months, it was closer to 15k and 6 months). Part of this was because we tried to do most of the work ourselves BEFORE hiring the professionals.

It's a great cash flowing rental that has appreciated well. We've had a few minor repairs since the rehab, but overall it's been good. We had a couple of great applicants within a week of listing it that still live there today.

Lessons learned? Challenges?

If you don't have time to do the work, hire it out. Don't try to "make time."
Over budget for repairs and have an uh-oh budget. It will never JUST be painting and flooring.
Don't give contractors second chances. We waited around on flaky contractors that ended up dragging the project out WAYYYYY longer than it should have gone.