203-K Home Rehab Loan in Jacksonville, FL

[David Coleman]

Investment Info:

Single-family residence buy & hold investment in Jacksonville.

Purchase price: $110,000
Cash invested: $3,850
Sale price: $126,000

Short sale purchase of a semi-completed flip with a purchase price of $78,000.
FHA 203-K rehab with a budget of $32,000.

Added value by:
- creating master suite (adding a bathroom to floor plan)
- adding a living room/family room
- new roof
- solar-tube lights
- renovating bathroom
- refinish and stain hardwood floors
- building a deck
- building a masonry entrance stoop

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

This type of deal was the only way that we could build what we wanted for the price.

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

This property was REO and the short sale process was the way we were able to get it. There was very little negotiating and offered at list price.

How did you finance this deal?

FHA 203-K Home Rehab Loan.

How did you add value to the deal?

Added value by:
- creating master suite (adding a bathroom to floor plan)
- adding a living room/family room
- new roof
- solar-tube lights
- renovating bathroom
- refinish and stain hardwood floors
- building a deck
- building a masonry entrance stoop

What was the outcome?

Lived in for 3 months.
Rented for 5 years.
Sold at modest ($16,000) profit.

Lessons learned? Challenges?

This is, more or less, the "traditional" was of doing deals. I'm looking forward to working smarter on deals in the future by funding as much of the deal up front with cash, rehabbing with cash, and pulling as much equity out of the property during refinance as possible.

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

Frankie Bonds Lee - Realtor
Doug Neill - Contractor