All Forum Posts by: Caleb Korzenowski

Nice work George! I'm working on my first ground up development currently and found this quite inspiring. Would love to chat over the phone if you ever had a free minute. Good luck moving forward. Cheers!!

Great story! I'm new to REI myself and BP has been a HUGE resource. Keep grinding!!

@Ranny Ma I just updated the post. The rehab cost was around $25k. We havent fully completed it so I will update once we run all the numbers exactly. Our realtor helped estimate costs but I also got a quote from the plumber during the inspection period. We couldn't turn on the utilities since it was bank owned so we just had to roll the dice a bit. Taking good measurements when during that time is helpful too. Find your square footage for paint and flooring then add 10% and calculate from there. We knew that we would be doing a lot of the work so I just had to find the materials needed. And I paid my friend cash who gave me a good deal on labor cost. I'm sure if I would have used contractors for everything they would have been able to give estimates but it would have been a lot more expensive. Hope that helps

I have a fair amount of experience. But neither of us had laid vinyl plank flooring before. YouTube University wins again! Home Depot has decent rates for installers also. Maybe try to find one that just needs cleaning and cosmetic touches like paint and flooring. Cleaning the place with bleach water, getting rid of the nasty carpet, and priming the walls made a HUGE difference! We bought slightly smaller windows and added custom framing then trimmed the outside with vinyl boards. That saved me about $1000 from the contractor quote. I still work 40 hours a week so this was mostly done at night and in weekends. But we are thinking we will be able to walk at closing with around $8000 over the total purchase and rehab and still cash flow around $500 a month. Time to find the next one!

Thanks! I'm excited to start the next!

Investment Info:

Single-family residence buy & hold investment in Duluth.

Purchase price: $56,000

Cash invested: $25,000

REO purchased with our HELOC and rehabbed personally with a friend along with a licensed plumber. All new PVC drains and PEX supply lines, hot water heater. Complete bathroom remodel down to the studs and joists. New flooring and paint throughout. Moved laundry to main level. Kitchen updated. New garage door opener. 3 new windows and roof repaired.

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

Property is in an area of growing rental interest and price was right. We felt confident that we could freshen it up and capture higher rent.

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

MLS listed REO. We started substantially lower than asking price and got in a bidding war. We ended up paying more than asking but still got a great deal.

How did you finance this deal?

Our HELOC and credit cards for rehab

How did you add value to the deal?

Heavy sweat equity.

What was the outcome?

Our tenants signed a 2 year lease and just moved in. Once we completely finish the rehab, we will get an appraisal and cash out refi. Any private lenders interested?!

Lessons learned? Challenges?

The rehab was very challenging and we learned how to push through obstacles and problem solve on the fly.

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

Michael Hoffman is our real estate agent in the Duluth area. He is an investor and quite helpful