First (Intentional) Investment

[Nathan Shepard]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $40,000
Cash invested: $20,000

First intentional investment purchase! Seller financed deal at $40,000 bathroom was down to studs, kitchen had no flooring and cabinets were falling off at the hinges, no gutters on rear of home, rear entry door suffered a break in and roof was leaking prior.

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

Saw the potential for a great BRRRR opportunity!

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

Friend of a friend had a vacant property that he planned on fixing, one thing led to another and 7 years went by without any progress. Small talk led to this deal being brought into my view.

How did you finance this deal?

Seller finance for initial rehab period, then pulled a HELOC to pay off seller financing and have extra cash available tied to the property. Equity after rehab was so great, a mortgage was never needed.

How did you add value to the deal?

Kitchen/bathroom upgrades were critical for this property.

What was the outcome?

A great BRRRR rental, enough equity to use the Heloc as a down payment for another buy and hold investment.

Lessons learned? Challenges?

Stay objective and don't let daunting rehab prevent you from seeing the potential. Live in flips give you a great advantage because holding costs count as primary living expense and you can work at your own pace, however live in flips make it easy to slack off and not get things done in a succinct timeline.

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

Kendra Shepard With Simply Homes KC