This is a 9 unit apartment (8 - 2 bed 1 bath and 1 - 1 bed 1 bath) building that was vacant and condemned in a great area close to the University. We will be doing a full gut remodel to the whole building. We bought the building for $275,000 we are putting $225,000 into it so total investment is $500, the after repair appraisal came back at $685,000. We will rent the building out for a monthly gross of $8,250.

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

It has a great location, it was very close to University of Nebraska Lincoln East Campus, and has a massive, brand new multi million dollar frat house next door. We have bought multiple properties that were very distressed this was just a much larger project. We were also very interested because we could buy it for little to no money down because we could knew we could get the after repair appraisal very high!

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

We happened to drive by when we were driving for dollars and we tried every way possible to get in touch with this owner. Finally we discovered where he worked and we knew a girl who used to work their and we asked her if she knew him, and she did but not very well. She reached out to some people who she used to work with that knew him well and the next day he finally called after a year and a half of trying to get in touch with him.

How did you finance this deal?

We have built a very strong track record with our bank and we have a great relationship with them so they financed the purchase and the rehab costs as a construction loan. Once construction is finished we will refinance this into an in house 5 year fixed 15 year adjustable rate mortgage. They wanted us to have some "skin in the game" so we had to put $55,000 down that we payed with our HELOC but when we refi we will get that money back.

How did you add value to the deal?

This deal is a full gut rehab, the unit were in terrible shape so we are doing new siding, new windows, new kitchens, new appliances, new bathrooms, new trim, new paint etc.

Lessons learned? Challenges?

3 days before closing we got the appraisal back and the appraiser had discovered from the satellite image on the GIS that the lot line was off, half of our parking lot technically belonged to the neighbor. So I had to work with them and they agreed to sign an easement agreement that gave the parking lot back to us and that delayed closing by 3 weeks.