SFH 4bed/2bath 1600 sf that had been sitting vacant for 5+ years. Sits on a beautiful corner lot in a transitional part of the Kansas City. Renovations expected to be completed mid-April 2020. Work has included entire replacement of lower level flooring/sub-flooring, new roof, replacement of half the interior sheetrock, reconstruction of front and back decks, reconstruction of kitchen and bathrooms from ground up. Not quite a full gut, but close.

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

Advice from a friend in the industry was to start small and cosmetic - completely opposite of this property. My dad and I are partnered in our LLC and we are both drawn to properties needing extensive repair, which this one definitely did. Also the price was right and the risk was relatively low. Using the BP calculator and a lot of research about rental rates and ARV in this area, my worst case assumptions are not that scary (I.e. leaving up to $10k in the deal - at worst).

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

I found the property driving for dollars, then saw it on FB marketplace 2 days later by a wholesaler who moved quicker than us. I still really wanted the property and he was asking a fair price.

How did you add value to the deal?

This being my very first deal, I haven't had a ton to contribute, however I am able to recognize experience in someone that can bring value. The gentleman who sold us the property has significant experience wholesaling and flipping properties so we hired him to manage the project for us - sharing his crews and management skills to help us learn. A true gem!

What was the outcome?

We are pretty close to being on budget about 4.5 weeks in and still seeming to be on schedule aiming to be done in 8 weeks total at the end of April. Ask me in a month!

Lessons learned? Challenges?

Nothing but lessons learned on this first deal. Learning about managing the order of operations in a full house renovation - first clearing out, then demolition, then repair the floor, then run the electrical and plumbing, then repair the sheetrock etc etc. May be obvious to experienced rehabbers, but all brand new to me. We're saving our receipts and making a lot of payments- but next time I will try to follow the budget and the spending a little closer versus saving it all for the end.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

In this case, no professionals were involved, though I have established relationships with agents and lenders that I am working on for the next deal. Stay tuned.