Cutting teeth in hometown

[John Dirks]

Investment Info:

Single-family residence buy & hold investment in Memphis.

Purchase price: $110,000
Cash invested: $10,500

Single family two story property in Memphis, TN.

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

I was looking for a 1% deal in a lower crime area where I could find a long term tenant to appreciate the property. Found the areas that the tenant I was after would like to live and looked there.

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

This deal was brought to me by a realtor via a wholesaler. I made an offer based on the numbers that worked for me, and we met where everyone wins, including seller, realtor, and wholesaler.

How did you finance this deal?

Cash purchase and rehab, then cash out refi.

How did you add value to the deal?

It was listed as a very large 3 bed 2 bath. I planned to add a bedroom as there was room in the house. After inspections, it turns out there were 4 bedrooms instead of 3. Bonus! My team refinished all the hardwood to a beautiful shine. Replaced the stove, dishwasher, and hood. Removed the wallpaper. Updated the bathrooms. New water heater and HVAC. Replaced the kitchen subfloor and installed LVP to match wood floors in the house. Made it a very enjoyable property.

What was the outcome?

Refinanced the property. Appraisal came in much higher than expected. Was able to pull out most of what I put in. CoCROI doubled. Currently rented. Hope the tenant enjoys and appreciated the property.

Lessons learned? Challenges?

Things are not what they seem. Plan for extra expenses, including wiring, plumbing, and any other unforeseeable. Most stores don't stock large appliances. Plan extra time for shipping/delivery. Have a checklist of all items, room by room, including outside, mailbox included. Don't sweat when you need to put in more money. Job has to be done anyway.

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

I spent some time building a good team. I would recommend them. Message me if interested. Most of them are not on BP.