Buy & Hold | May 2020 - June 2020

[Wale Lawal]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $72,000
Cash invested: $6,385

Contributors:
Mark Sewell

This is a 1,423sqft 3bed/1.5 bath buy and hold property I bought from a local wholesaler.
After Repair Value (ARV) = $169,000.
All in at 65% of ARV.
Rebab for $27,290.
Converted the over-size garage to a 4th room and additional toilet (forced-appreciation) making the property 4bed/2.5 bath.
Renting for $1,425 on a 12-month rent.
Cash-out Refinance in progress at 80% LTV.
Project completed on 6/15/2020.

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

Cash Flow and Appreciation - Long Term Financial Freedom Strategies via Real Estate Buy and Hold Single Family Homes.

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

Found through a Local Wholesaler - Asking $88,500 but I closed it for $72,000

How did you finance this deal?

Local Hard Money Lender

How did you add value to the deal?

Converted garage to a 4th room and additional toilet (forced-appreciation) making the property 4bed/2.5 bath.

What was the outcome?

Did not over-rehab. Budgeted $30,000 but spent $27,290.
Renting for $1,425 on a 12-month rent.
Cash-out Refinance in progress at 80% LTV.

Lessons learned? Challenges?

Challenges:
-Speed of rehab completion is key, I could have finish 2-weeks earlier.
- Inadequate reserve to mobilize my contractor kind of slow rehab down at the beginning stage.
Lessons Learned:
- I could have negotiated a better loan terms - 12% Interest Rate and 3% Origination Fee was kind of high.
- Establish clear payment milestones with contractor and tie it to deliverables.
- Test the paint on the wall before picking the final paint color.

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

Yes. Any competitive local or regional lender will get the job done.