All Forum Posts by: Chase Gibson

I knew getting all of my cash out was going to be a challenge, but I was happy to be able to get the full purchase price back out of the deal, and all that is left in it is some rehab costs. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000
Cash invested: $12,000

I bought this single family home 4/30/2019 and unfortunately didn't begin the renovations until 6/1/2019. The rehab was completed in mid July and I was able to get tenants in place 8/1/2019. The home is rented for $1,050 and my monthly principal, interest, and taxes will be around $700. Monthly cash flow of $350/month, obviously a portion of that will be used for repairs, maintenance, and capex. Not a homerun by any means but it it a solid rental now and my first fully executed BRRRR deal.

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

Wholesaler. Multiple offers, but mine was the only "cash" offer so I got it.

How did you finance this deal?

I purchased the property with funds from a private lender and was able to get the property appraised for $117,000 after the rehab was finished. My lender then let me refinance at 75% of that ($87,300) at 5.25% fixed for 30 years.

How did you add value to the deal?

Full interior rehab.

What was the outcome?

Rented the property for $1,050.

Lessons learned? Challenges?

Don't put off things you know you need to get done related to the rehab. Time is money & worry.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000
Cash invested: $12,000

I bought this single family home 04/30/2019 and unfortunately didn't begin the renovations until 06/01/2019. The rehab was completed in mid July and I was able to get tenants in place 08/01/2019. I purchased the property with funds from a private lender and was able to get the property appraised for $117,000 after the rehab was finished. My lender then let me refinance at 75% of that ($87,300) at 5.25% fixed for 30 years. The home is rented for $1,050 and my monthly principal, interest, and taxes will be around $700. Monthly cash flow of $350/month, obviously a portion of that will be used for repairs, maintenance, and capital expenditures. Not a homerun by any means but it it a good solid rental now and my first fully executed BRRRR deal.

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

Wholesaler

How did you finance this deal?

Private investor, followed by a rate and term refinance with a local bank.

How did you add value to the deal?

Full interior rehab.

What was the outcome?

Rented the property for $1,050.

Lessons learned? Challenges?

Don't put off things you know you need to get done related to the rehab.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $129,000
Cash invested: $26,000
Sale price: $199,900

4 bedroom, 2 bathroom, 2 car garage, 2021 sqf. This home needed a complete cosmetic remodel. We addressed the flooring, painting, cabinets, both bathrooms. I will upload more pictures soon as it is going on the market tomorrow 03/15/2019.

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

Saw too much equity in the property not to jump on it.

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

Craigslist. I inquired about a different property that the previous owner had for sale, but when it didn't work it he mentioned this one to me and it was a great deal.

How did you finance this deal?

Private funding.

How did you add value to the deal?

Complete cosmetic interior rehab, basic landscaping.

What was the outcome?

It is currently listed for sale on the MLS.

Lessons learned? Challenges?

To not approach a property undecided on if you want to rent it or flip it. Make up your mind one way or the other and proceed accordingly. This is not to say, don't have backup plans if plan A doesn't work out, but rather to keep your focus on plan A UNTIL it doesn't work out.

Teresa, that is unfortunate that the agent put you in that situation.  I would keep the earnest money and relist the property in hopes of finding a buyer who is easier to work with.

 Chris,

Thanks Chris!

My properties are all located in Edmond, OK.  I do self manage at this time, but I always run my numbers factoring in property management.  I hope to grow my portfolio to the point where I need to hire property management. 

Background: 25 years old with a full time W2 accounting job. I grew up with a dad that owned rental properties, but I did not get very interested in the business until the spring of 2016 when I started devouring books/podcasts/blogs.  I purchased my first investment property in December 2017.

Current portfolio: 33% owner of 3 single family rental properties in the OKC, OK area (dad and brother are my partners). 50% owner of 2 single family rental properties in the OKC, OK area (dad is my partner).

December 2017: Closed on my first investment property with my dad.

The numbers: Purchase price: $125,000. Rent: $1,350/month. Repairs needed: None. This property was rented when we purchased it and we still have the same tenants today.

March 2018: Closed on a two property package with my dad and brother: The numbers:

Property 1: Purchase Price: $65,000. Rent: $775/month. Repairs needed: $2000.

Property 2: Purchase Price: $76,000. Rent: $1,000/month. Repairs needed: None.

June 2018: Closed on a single family rental with my dad and brother:

The numbers: Purchase price: $115,000. Rent: $1,250/month. Repairs needed: None.

November 2018: Closed on a single family rental with my dad. We just closed on this property and we are not sure if we will flip it or rent it out, but there was too much equity to pass up the deal.

The numbers: Purchase price: $129,000. Repairs needed to get rent ready: $5,000-$10,000. Repairs needed to get close to top dollar as a flip: $20,000. We believe we can rent it for ~$1,500/month. The after-repair value if we put the $20,000 into it would be $180,000-$190,000.

Biggest mistake: Not putting all the necessary clauses in my lease agreements. Specifically related to the consequences around not maintaining the lawn care of my properties.

2019 Goals: Acquire 8 more “doors”, with one of the properties being 100% mine, without partners.

Thanks for reading about my 2018 story! I am just getting started!

Simcha, I could not agree more.  I came to BP to ask a question PRIOR to making any decisions.  I always thought of this site as a safe place to ask questions without being ridiculed for a decision that I haven't even made yet.

 Dan,  This is the kind of response that is incredibly helpful.  I appreciate your input and how you presented thoughtful points, as well as, alternative options to consider.

Are all ethical issues removed if you were to add in the contract language similar to this?:

"Buyer has the right to refinance or pay off the mortgage at any time, penalty free, for any reason.