HUD home that no one wanted!

[Shane Martin]

Investment Info:

Single-family residence fix & flip investment in La Pine.

Purchase price: $250,000
Cash invested: $60,000

This unique single family ranch is currently under construction. We'll be listing somewhere between $425 and $450 when completed. The house is bizarre and totally primed for some really cool design concepts. Originally built in the 80's and added onto twice, that we know of. The floor-plan keeps you on your toes. With some rustic meets modern finishes and some attention to the cozy character of the structure itself, this one is going to make a great home for a growing family.

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

It's odd! Also, the market in La Pine suggests that, a larger ranch style home with a big lot and a huge shop, should be eagerly sought after. That and I found out that no one else had even inquired about it. There was this big scary question mark surrounding the lack of water from the well to the house itself. I did the math and realized that even a total overhaul of the plumbing system in the house would still allow for this deal to work so I pursued it.

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

I found this one on craigslist. The negotiating process was as simple as making a lot of consecutive offers. Because the house was HUD owned and we happened to be the only ones making offers, it was a matter of time before we met in the middle.

How did you finance this deal?

Cash with the help of some great partners. We are currently under construction and getting ready to close on a cash-out refinance that will get all of our money back out there hunting more deals for us!

How did you add value to the deal?

We are redoing everything! New kitchen, baths, flooring, doors, appliances, plumbing and lighting fixtures! We are focusing on tying three different additions into one harmonious home.

Oh, and that plumbing disaster... it was just a broken valve between the well and the home. A $50 part and we are back in business!

What was the outcome?

I'll let you know when we get to the finish line!

Lessons learned? Challenges?

Analyze your deal based on the worse case scenario and have a plan B. If it doesn't work, walk away. And if you feel like you have something make the offer and get it under contract! The money will follow.
If we end up completely underwater with tis one. We know that we can support the property as a rental. We'll sit on it for a while and build some equity.

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

Always. You cant do this alone! Treat your professionals as if they are partners. They are the ones who will get it done!

Reach out if you would like a name or two!