Investment home and a place for Mom.

[Aaron Malejko]

Investment Info:

Single-family residence buy & hold investment in Canon City.

Purchase price: $110,000
Cash invested: $30,000

c 1898 3 bed/2 bath home with 1 car garage and shop.

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

I was looking for a place we could fix up for my Mom to move to from out of state. I wanted something close to us as she got older. Something at the same time I could keep in my portfolio. I wanted a rental and she didn't want to buy a house.

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

I had my real estate license now so I just checked the MLS daily until I found something inexpensive that Mom liked. There was no negotiating allowed. Seller wanted list and not a penny less. As-is. Cash only. Seller was very difficult and kicked the last buyer's inspector out of the house mid-inspection. I had to convince her that we wouldn't do a full inspection. She allowed a 30 minute walkthrough.

How did you finance this deal?

Even though seller would only do a cash deal, we got her to allow us to get financing. We went conventional, 20% down.

How did you add value to the deal?

Gutted to the studs and still not done. Had to replace all electrical and plumbing and level floors. Actually changed floorplan of the house. It was obvious once we got into it why she didn't want inspectors.

What was the outcome?

Still working on it but have 2 bedrooms, kitchen and a bathroom done. Enough for Mom to move in.

Lessons learned? Challenges?

We very much under-estimated the remodel time. If this was a fix-n-flip, we would have been in trouble. We've learned a lot about older homes and if we saw this one again, we probably would have passed. It will all work out though.

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

Not on this deal.