Farmere Circle, North Little Rock

[Damon Cluck]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $39,500
Cash invested: $30,000

This was a bank owned property. Remolded in 2010 to include widows, siding, a garage conversion and a roof. It had been vacant for some time and the inside was rough. FEMA had issued a new flood map for this area. I ordered an elevation certificate. The inspection found no evidence that the home had ever flooded. FEMA flood insurance ($5000 deductible) is $3000 per year! The property will rent for $975-$1025 when completed.

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

I am focusing on Foreclosures in my area. I purchase for cash, rehab with my HELOC, and then refinance.

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

It was a bank owned foreclosure in my area. I was able to get a reduction in price due to the flood zone issue.

How did you finance this deal?

I purchased it and am doing the rehab with my HELOC to avoid the necessity of buying flood insurance.

How did you add value to the deal?

The home had previously had a garage converted to living area. I am adding a bathroom to this area taking the house from a 3/1 to a 4/2. New granite counter tops, new appliances, fresh paint and flooring throughout.

What was the outcome?

Still in progress.

Lessons learned? Challenges?

The previous garage conversion turned out to be permitted. This had caused a delay in the electrical permitting process. The inspector wanted to inspect all the existing work before allowing us to proceed with the construction. Also learned a long on permitting. I did not pull a general permit for the work I was doing. My electrician and plumber pulled permits , but I ran into issues because I didn't have the general permit. This was simple and inexpensive to fix, but caused a delay.

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

John Belden, Century 21 Prestige Realty is may agent. Very investor friendly. His company is also my property manager.