Investment Info:
Single-family residence buy & hold investment.
Purchase price: $70,000
Cash invested: $70,000
We were able to get this one for a good deal from a motivated, out of state RE investor. It had been partially flipped when we got ahold of it but it still needed some major work. It got its name "Ginger House" from our son who couldn't pronounce "Virginia House" which was what my wife and I were originally calling it - named for the street it's on. Needless to say, we will forever call it Ginger House now.
What made you interested in investing in this type of deal?
My wife and I were looking for an old house that needed some love. We wanted there to be plenty of potential to add equity and with other potential comps on the same block going for upwards of $200K, this one seemed like a no-brainer.
How did you find this deal and how did you negotiate it?
My wife found the deal on Realtor.com when the price had dropped $10K. I called up the realtor who explained that the owner lived out of state and wanted to get out from under the property. We offered $10k less than the asking price and they accepted the same day!
How did you finance this deal?
My wife and I decided to tap into the equity in our own home to get this deal going so we used a HELOC to finance most of it. We did end up using a small personal loan as well to get it across the finish line as we hit some unexpected COVID related expenses, but being our first Income property, I think it all went pretty well.
How did you add value to the deal?
Larger items included foundation work, new HVAC, a new roof, exterior paint and a completely new front porch. We also completely renovated the bathroom with the exception of the tub and the toilet. We tiled the floors, shower and walls, a lot of which I did myself. We did cosmetic work in the Kitchen where we added a large backsplash, swapped out the sink and updated the counters to some affordable but beautiful butcher-block and cement counters. Rest of the house was skim coated and painted.
Lessons learned? Challenges?
We learned a lot about budgeting for a Reno!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We got our HELOC through Community America, who was great! Their tech seems to always be a little behind, but their customer service and great product offering makes up for it ten fold!
