UNMC Area Brick Tudor BRRRR

[Owen Dashner]

Investment Info:

Single-family residence buy & hold investment in Omaha.

Purchase price: $120,000
Cash invested: $75,000

Contributors:
Brandon Tauber

This is a super cool brick Tudor we bought close to the Med Center area just south of Leavenworth in Omaha. It was really dated with an old bathroom and kitchen, it also had a huge dormer upstairs that was pretty janky. We think the surrounding UNMC area is going to blow up even more than it already is with all of the new developments and added staff, so we decided to deck this house out and BRRRR to keep it as a long term rental for Doctors and medical staff.

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

Brick houses, especially Tudors, are one of my fav types of construction. The fact that we were able to buy for such a great price gave us options for exit strategies. The Med Center is a target spot for us right now with all of the new green lit construction and jobs being added, so we decided to keep it.

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

We actually paid more than the seller was asking for it, because it was worth it, and he did not know what he had. We felt it was the right thing to do.

How did you finance this deal?

We bought using our line of credit.

How did you add value to the deal?

We put in a new garage door, window trim, entry door and windows. We gutted the kitchen and main bath, and added a full master suite with a sweet en suite to the dormer (lots of sweet suites!). We also replaced the furnace, refinished hardwoods and painted throughout.

What was the outcome?

The property appraised at $250,000. We pulled out $212,500 (85%) which was more than our investment at 4.5%. It rented for $2,350. No money in the deal, 400 bucks (ish) cashflow even after PM fees.

Lessons learned? Challenges?

This project took longer than anticipated, blew the budget by $15K, and rented for slightly less than anticipated. But, we were OK with all of those things since the numbers still make sense and 30 years from now it will still be a killer asset.

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

Stephen Ward with Exceptional Properties Group for the project management on the construction and the PM work. American Interstate Bank for the long term financing.