So, I had been looking for a good deal in Columbia, TN for months, but everything I found just didn’t work on paper. Then, at a REIN meeting, I met a wholesaler who told me about a property in the area I was looking at that had tons of potential. The catch? The showing was the next day, and it was the last chance to put in offers—plus, there were a lot of other investors interested.

The Showing: A Quick Decision with My Contractor

I decided to go for it and showed up early with my contractor to check out the house. It was a 3-bed, 2-bath with a new roof, updated plumbing, electrical, and HVAC—basically all the expensive stuff was done. But the cosmetic work? It was terrible. Walls were uneven, the floors had gaps, and everything was super shoddy. Another investor had tried to flip it at $280k, but after a few price drops, it wasn’t selling. Now, it was rented out, with the tenant promised to vacate once it sold.

The Offer: Bidding War and a Slight Overbid

The wholesaler wanted $180k for it. After talking it over with my contractor, I figured with about $19k in cosmetic work, I could push the ARV to around $250k. But there were other investors at the showing, so I had to go in a bit higher to beat them. I landed it at $181k—feeling good, right? Yeah, that didn't last long. My plan was to rent it out long-term, with plan B being to flip it. Either way, I felt good about taking on the house with multiple exit strategies.

The Tenant’s Exit: A Costly Move

The tenant left as agreed—but not without causing some damage. They took all the appliances (goodbye stove and fridge) and left the place a total disaster. On top of that, they decided to sabotage the plumbing by dumping gallons of cat litter in the tub drain. I called the wholesaler’s company for help, but my rep had left the company (I was his last client). They claimed they didn’t have the tenant’s info and couldn’t help. Now I was stuck with the bill for the stolen appliances and plumbing issues, which cost me an extra $3,000. But I was still determined to make it work.

Surprises in the Rehab: Foundation, Plumbing, and Electrical Issues

Things really started going sideways once the contractor began replacing the floors. We discovered structural issues that needed an engineer and $10,000 worth of foundational work to fix. Then we found plumbing problems that set me back another $5,000. And just when I thought it couldn’t get worse, tearing out the poor drywall that had been installed revealed illegal electrical wiring that needed to be completely redone. Another $10,000 down the drain.

Setbacks: Flood Damage Adds to the Costs

By this point, I was into the property for $19,000 plus the additional $28,000 in repairs, and things were starting to look pretty good, and the house was almost finished (yay). But then my contractor took a couple of weeks off to help another client because he was behind schedule from my lengthy rehab. When he came back, the house was completely flooded. Someone managed to flood the back of the house by turning on the water. I never figured out who did it—maybe an angry neighbor that were tired of months of construction noise, or maybe the old tenant—but either way, we had to replace the brand-new floors. It cost me an extra $6,000 in damage and 10 days to wait for floor materials that were out of stock (of course). All in all, the rehab cost me $60,000 including the looong holding costs instead of $19,000.

A New Strategy: Mid-Term Rental and Furnished Setup

With all my backup plans shot, I had to come up with something else. Just before all this, I had furnished a DADU at my house, planning to rent it out furnished. Then, my neighbor’s retired dad asked if he could rent it—but he wanted to bring his own furniture. I hesitated at first, but then I realised this extra set of furniture could be my solution.

The Solution: Turning the Columbia Property into a Mid-Term Rental

I decided to turn the Columbia house into a mid-term furnished rental with the furniture from the DADU. I reached out to local companies that house project workers coming in for 6+ months. Within four days, I had a tenant for $2,500 a month. The property went from cash flow negative as a long-term rental to bringing in $600 a month in cash flow, and I had hit the 1% rule. Despite the big headaches, it all worked out in the end, and I've learned a ton...

Key Takeaways: 📚

1) Always be ready for the unexpected: This deal taught me to expect the worst—and still keep pushing forward. You can find a solution 💪
2) Change the locks ASAP: As soon as you take over a property, don’t wait to change the locks. 🗝️
3) Don’t rush a buy: Bring in experts for plumbing, electrical, etc., to do your due diligence. 🔍
5) Be flexible and adjust your strategy: When things go sideways, don’t be afraid to pivot. I switched from long-term rental to furnished mid-term rental, and it paid off. 🔄
6) Always have multiple exit strategies: Things can go completely sideways, so be prepared. 🛣️
7) Expect rehabs to cost more than planned: Have a buffer in your budget—trust me, you’ll need it! 💵