I bought this 1,800 SF, 3BR/2BA property as a pre-foreclosure in 2012 when my step-mom, who lives across the street, saw it was up for sale. Purchase price was $77,500 cash with another $2,000 in closing. I put about $6,000 into it and then rented it out to the same tenant until 2018 when I decided to fix it up to put it on the market. After replacing the roof, foundation repairs, flooring and more I put about $50,000 into it and sold it for $160,000. Overall I was ahead by a little bit.

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

I had been renting the two previous houses I had lived in for a number of years already and they were appreciating and generating a little cash flow. This property came at a really low price and I figured I'd pick it up and rent it for more cash flow. It never really cash flowed that great though.

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

I was stationed in Japan at the time, but my stepmom lived across the street and told me it was in pre-foreclosure as the owners were getting divorced. Didn't really negotiate much, and picked it up at $77,500.

How did you finance this deal?

I had been stashing away cash from the numerous overseas deployments I was doing for several years, so I paid cash for the property and repairs before renting it.

How did you add value to the deal?

I used it as a rental for 5 years during which time it appreciated significantly. I then started to do paint flooring and minor repairs when we ran into the roof problems and the foundation issues. So got those fixed before putting it on the market.

What was the outcome?

It turned out to be not terribly impressive as a rental, pretty much breaking even. Although the value had doubled in the 6 years since I bought the place, the expenses of getting it move-in ready ate into much of the appreciation.

Lessons learned? Challenges?

Because I paid cash I didn't have an inspection which probably would have found the foundation problems. I also learned my niche is as a passive investor and not as a flipper. While I'm handy enough, I just didn't really enjoy the hands on part. I brought in several iterations of terrible contractors along the way and learned that unless you protect yourself, contractors will screw you. Put it in writing!

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

My Realtor, Loretta McNally, with EXP Realty was phenomenal! I was living in Texas at the time and she went above and beyond to help me out during the rehab, and with the sale. Highly recommend!