All Forum Posts by: Chris Sullens

The $13,000 includes:

Replacing one entire gable, repairing another gable, tearing out all bathroom tile and old vanities, new flooring (vinyl plank), 4 new ceiling fans, 2 new toilets, 2 new bathroom vanities with new countertops, sinks and faucets, new kitchen counter with new kitchen sink and faucet, paint on all surfaces inside and out (except brick), new doors, new hinges, new cabinet hardware, new bathtub surround, minor carpentry repairs, all new light fixtures, all new switches and outlets throughout, some minor electrician work, minor plumbing work, various minor drywall repairs, gutter repairs, painted concrete porch, new pillar for front porch, doorway thresholds, all new blinds, replacement of a broken window pane, all the appliances, and all the labor. I'm sure I'm forgetting something but that's about it. 

@Austin Peck, I don't really have the breakdown, but I worked every angle I could think of. For one thing, I got in contact with a property manager in town and used referrals from him to find contractors. He has spent a lot of time finding people who can do good enough work at a low enough price. The floors, for example, I got done for right at $2000. That includes materials and labor, as well as tear out of the old floor. I learned that you can get paint from Sherwin Williams for about $20/can if you know to ask for ProMar-200 (which isn't on the shelf anywhere). I went appliance shopping on craigslist the day after a big memorial day sale at HomeDepot when people were unloading their "used" appliances. So I got that fridge, range, vent hood, dishwasher, microwave, washer, and gas drier for $800 all together. I bought most of the regular supplies at Home Depot and looked for anyway I could save. For as much as we did to the place, I'm pretty happy with the cost. 

@Evelyn Tilman, I put in some work, but mostly it was hired help. 

@Jason Chen, yeah. The truth is that I stumbled across this deal before I was really prepared to act on it financially. So I had to scramble and hustle to make it happen. The weeks for the HELOC to go through would have killed the deal. Of course, if I had been planning further ahead, that might have been a better option.

@Mason English. I was going to try and use a HELOC, but when I learned that I could take a loan against my truck for 4% and with just a $100 fee, and get it the same day, I just did that. So 15k from car loan. 5k Credit card. And the rest just cash from savings. I plan to payoff the loans pretty quickly.

Thanks @Jason Chen. It is Agreeable Grey from Sherwin Williams. 

@Rocky Griffin, actually I got a pharmacy student in there who has 2 years of school left, so I imagine she will likely bet there for the full 2 years. 

So after much reading, I finally decided to take a shot at my first real estate investment; thanks in no small measure to all the wonderful information here at BiggerPockets. So here are the details:

Closed 5/11/17 

Finished Rehab Mid July

Placed a tenant Mid August

1,100 square foot  3 bed, 1.5 bath house, built in 1970, on a corner lot 1 block from a major university and health complex in Oklahoma City. 

Before Pics:

http://imgur.com/a/Zo8Ai

After Pics:

http://imgur.com/a/J46ka

Here are the numbers:

Purchase price: $55,000

Down Payment: $15,000

Monthly Mortgage (with taxes and insurance): $308

Closing costs/transactional fees: $3,600

Rehab costs (including appliances): $13,000

Monthly Rent: $975

So, I'm really happy with how it turned out, and I think I will be able to increase the rent next year too. Now it's time to start thinking about deal #2! Much thanks to everyone who helped me make this a reality, especially @RhettTullis and @ChrisLauhon and everyone at Integrity Oklahoma for helping guide me through the process. 

I am in the process of a refi, and I can't believe the fees involved! Especially considering that the property is not changing ownership! Here are the fees: 

Survey Fee $135 

Title - Abstract $750 

Title - Closing Fee $300 

Title - E-Recording Fee $15 

Title - Examination Fee $175 

Title - Federal Court Check $50 

Title - Final Title Report $120 

Title - Lender's Title Insurance $617 

Title - Title Services Fee $150 

Title - Uniform Code Cert $50

Total: $2,362!!!

Am I being ripped off? What's the best way to avoid or shop around for better deals. Any advice is appreciated. 

That's why I said it represents a floor. You may be able to find individuals who value the property more highly than the price calculated from 10-20% cap rate. That's where comps come in. But if your comps put the value of the house such that cap rate is > 20%, then the valuation is just wrong. It's wrong because there are buyers who will buy the house purely for the ROI. Valuing the property less than what they will pay amounts to simply being incorrect about the value of the property.