Buy & Hold Rehab, will BRRRR

[Colleen Fiumara]

Investment Info:

Single-family residence buy & hold investment in Halifax.

Purchase price: $188,000
Cash invested: $17,000

This is a small bungalow up in my town center commercial zone but grandfathered in as legal non-confirming residential. I used a fannie mae homestyle loan and renovated the cottage into my home office space for now. It will be a nice 1bd/1bth rental when I move on to a different office space and rent it out. The lot is .7 acres with 200 feet of frontage. My longterm goal will be to have a small office building built on the lot. My back yard backs up to our town's Walmart parking lot.

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

The location and size of the lot, the zoning being mixed use commercial/residential.

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

It was originally on MLS, I spoke to the agent when it was under agreement and she called me back when the original deal fell through! We had a failed septic test that allowed me to negotiate down further and obtain a rehab loan including septic replacement.

How did you finance this deal?

Fannie Mae Homestyle

How did you add value to the deal?

We replaced the entire septic systems, rehabbed the cottage with windows, doors, roof repair, exterior paint, interior original wood floors refinished, some LVP added where needed, complete kitchen replacement.

What was the outcome?

So far I am using it as my home office about 3 minutes away from my personal home in my town, I am refinancing now then will rent this when I leave and move on to whatever my next office space will be!

Lessons learned? Challenges?

I learned a lot of hard lessons during the rehab loan, finding contractors to estimate was difficult, getting the vendors paid by the bank was difficult, there are a lot of extra fees such as a required HUD consultant, inspections and draw fees.

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

I am a real estate broker/owner, I also contributed my fee to the seller as part of my offer. I would not recommend the lender I used.