We found this not quite distressed condo about 45 minutes away from our primary residence on the MLS. It has new HVAC and water heater, and the plumbing and electric are good. We paid $21,800 down, and it needs $5-7k work -- appliances, bathroom fixtures, doors, and paint. ARV could be as high as $110,000.

This condo, although technically a 1-bedroom, actually has a finished basement room with a closet. We will list it as a 2-bedroom unit, bringing in a better monthly rent than other true 1-bedroom units.

We offered asking the day after it came on the MLS, as it was priced well for the market, and our offer was accepted several days later. We received $750 at closing for repairs. We had hoped to negotiate this number higher, but, in this hot seller's market, we decided this was reasonable.

This is our first property that needs work, and we hope to complete it by early July '21 and have tenants in it August '21. I will be working with my friend who is a contractor to complete the work. I plan to have a professional come in to repaint the unit.

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

After successfully renting our first investment condo, my wife and I kept our eyes open for more condo deals in the northern NJ area. Given the insanity of the housing market, and our limited funding, this meant narrowing our search to the Sussex County area.

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

I found this property on Redfin the day it went public, texted my realtor, and we saw it the next day. The asking price was reasonable for the market, even with the cosmetic repairs and upgrades needed. We put an offer in for asking, and it was accepted a few days later.

How did you finance this deal?

30 yr. fixed conventional mortgage with 25% down and no points up front. The interest rate is 4.375%.

The down payment and renovation cash came from a cash-out refinance on our primary and from our own investment savings.

How did you add value to the deal?

We were able to close as quickly or as slowly as the seller wanted, and ended up closing 45 days after making our offer. Our financial position was strong, and our down payment was 25%, so there was no uncertainty in our ability to perform.

Now that the property is ours, we will be putting $5-7k of work into the property, which could raise its value as high as $20k. In addition, although it appraises as a 1-bedroom unit, it can be rented as a 2-bedroom condo.

What was the outcome?

Although receiving communication from the sellers and their agent, we made it to closing as expected and promptly changed the locks. The condo will be refreshed soon.

Lessons learned? Challenges?

Keep pushing the sellers and their agent if communication is lacking. Get a good buyer agent and lawyer who can do this on your behalf. Don't be afraid to ask for concessions, even in a hot sellers' market. At least we got something!

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

Realtor: Alex Knox - Keller Williams, Ridgewood, NJ
Attorney: Margaret Miller, Montville, NJ
Mortgage Broker: Peter Appolito - Finance of America, Paramus, NJ