All Forum Posts by: David Clark Roper Jr.

@Joe Homs Hi Joe thanks for the response! While a reverse mortgage could certainly be an option one day, my mom is only 53 so I think with the equity in this home we have an opportunity to build her a portfolio, just trying to figure out the best way to go about it. It was passed on to her through his estate, she has settled the taxes already. Thanks!

My mom recently received the deed to the house she lives in that was my grandfathers. It is paid for, and we think the value is around $180,000, but needs 30-40k of work, and could be worth 230,000-250,000 ARV. The home is sentimental so we would like to keep it but we are not set on her living in it. She has no retirement so we would like to add a rental for her soon and she has almost no cash in the bank.

My question is, what do you think may be the best way to extract the equity, and to use the value in this home? Should we get a HELOC and make the repairs? Cash out re-fi and buy a second home for her, and rehab/rent her current home? I even thought about my wife and I purchasing it with a 203k and doing the repairs. Any other ideas I am not thinking of?

Thanks!!

Hi Reed, thanks for the comments! I will try and post some photos here soon. 

•We were able to rent for $775 ($50/month higher than previously rented) Cash Flow is $288

•Right now we plan to hold, the area just got a new high school and plans are for a new elementary school less than a mile down the road. Amazon is also building a new distribution center 10 minutes away that we hope will bring a boost to the economy, so we want to wait and see with this one. 

•Total rehab was about 3 weeks but it was done 1,2 hours at a time on my lunch break and Saturday mornings. We hired someone for the laundry room and kitchen cabinet painting and it only took them about 3-4 days. 

•Next steps for me: I promised my wife I would press pause until our new baby is born in December WHOOP and until I graduate from night classes (also December). 

I hope in January to begin my RE license so I will have access to the MLS and the ability to see properties without having to wait on someone else.

My goal next year is to do a minimum of 2 deals (most likely single family buy and hold), and I want one of them at least to be a foreclosure so I can learn more about the process

Investment Info:

Single-family residence buy & hold investment in Hueytown.

Purchase price: $50,000
Cash invested: $20,000

We bought our first single family home, a 2/1 with minimal work needed. We renovated the laundry room, added a refrigerator and painted the cabinets to bring a fresh, clean look, along with a little bit of hands-on TLC we did ourselves on weekends and during our lunch breaks.

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

We wanted to create our first passive revenue stream and thought a deal of this size would be a perfect fit for us to start and learn with.

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

The listing was on Zillow for several months with 2 price drops. We used the listing agent for the purchase.

How did you finance this deal?

We put 25% down and financed the rest through a local mortgage company.

How did you add value to the deal?

We painted the cabinets that were outdated but in solid shape. The laundry room had cracked wood paneling walls and peeling vinyl flooring that we replaced with peel and stick vinyl planks, and added 1/4" sheetrock and new beadboard wood paneling for an updated look. We bought a new stainless steel refrigerator, pressure washed the house as well as the deck and painted the front railing.

What was the outcome?

So far so good, we listed with an agent who has extensive experience in rentals. She brought tremendous value by walking through the property and suggesting things to fix that would matter to prospective renters, as well as screening the calls and showing the property. She only charged us the first months rent which we felt was more than reasonable.

Lessons learned? Challenges?

The first thing I learned is how much harder and at the same time, easier this was than I anticipated. The process itself was not nearly as intimidating as we expected it to be once we got started. However, the time it took to take care of all the small things we didn't consider, really added up (turning utilities on/off, time in transit going to the property, finding a truck to borrow when we needed one). As we grow we will continue to build a team that we can outsource these tasks to.

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

Melissa Decarlo @ Renesant Bank was fantastic, also Christi Knowles @ ERA King as our rental agent.