All Forum Posts by: Katelyn B.

Welcome Paige! My husband and I are newer investors in NWA as well (2 properties). Would love to talk real estate anytime! 

Thank you for the input @Ray Fisher and @Hadar Orkibi. I contacted a local real estate broker who does broker price opinions and he advised in my market it's best to leave as a true garage but that there should be a little bump on the appraisal for the nicer finishes and temp control.

He said that even with it being heated and cooled there is a high probability it would not receive the same price per foot as the rest of the house (makes sense). We weren't looking to put a lot of $ into it - mostly sweat equity with some nicer furnishings if it goes Airbnb.  I just didn't want to miss anything that may potentially help!

Thank y'all again, and I'll try to post the results when we get the info back. 

Hi everyone,

We ave rehabbed our second property and are about to refinance. We are currently living in it but plan to Airbnb or long term lease this property later this year. This is a 3/2 ranch with an attached 2 car garage.

We are still finishing cleaning up the garage - it is now insulated and painted and we will be epoxying the floor and likely adding a window A/C unit. I realize this may sound like overkill, but the garage was in awful shape and we live in a mountain biking tourist area. The garage will be used for mountain bike storage and as an area to work on them.

Our idea is to have this as a garage/livable rec room (see photos below for ideas). We want to keep the overhead door, and there are two windows. If the area is properly temperature controlled and up to code with smoke detectors, is there anything else we should do/know to influence how this is listed on the appraisal? Would it be better to be a garage or additional living space (460 sq. ft.)? 

Any advice would be greatly appreciated!

Katelyn

Welcome to the area @Stephen Brown! REI NWA has been a good resource for us and there are a couple of other meetups in the area that are great too for connecting with local investors. This is a challenging time to be getting started, but homes are still selling for sure. Best of luck to you!

Thank you Kurt! This is such great info. Have you used IKEA countertops before? Any issues with them? And yes, Arkansas is a beautiful state. It's quite cold now of course but the Spring and especially Fall up here is fabulous!

Wow, you were able to get a lot done with that reno budget! My husband and I are planning to get started soon on our first unoccupied flip as well. Thank you for listing some of your resources, and congrats!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $142,000
Cash invested: $10,000

Purchased this home in 2012 as our primary residence and lived in it until 2019 when it became a buy and hold rental.

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

This home is located in a redeveloping downtown area that has seen a lot of growth the past few years.

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

Complete renovation purchased from our contractor who owned the property and worked on to live in himself. He was working on a separate deal for a someone we knew so this property came up from letting him know we were looking for a downtown property. After we agreed to purchase, we worked together to select finishes that we both agreed on in case we ended up not purchasing after completion.

How did you finance this deal?

Conventional loan, 5% down.

How did you add value to the deal?

This was our first home so the budget was very tight starting out. There were unforeseen issues on both our end and the contractor's (the home was in awful shape and over 100 years old) but we ended up working well together and holding up our end of the agreement even though both sides weren't able to have everything they wanted at the time of purchase. Over time, we cleaned up the yard, landscaped, added a privacy fence and leveled and sodded the yard.

What was the outcome?

We were able to live in a home that we loved, in an area that we loved, for 7 years and then turn it into a higher end buy and hold. We have also used the equity (heloc) to invest in more properties-appraisal of $208,000 in 2019.

Lessons learned? Challenges?

This is the home that sparked our interest in real estate investing. I feel so fortunate to have experienced the growth that we have and that we've been able to see first hand how well it works. Only wishing we would have gotten started sooner! There have been and will be issues (hvac trouble, improper installation of flashing on roof causing water damage, lots of manual labor from my husband to save $, fear of the unknowns) but the benefits have outweighed the challenges for sure.

@Brian Sparr thank you so much for your response and advice. We are looking to live in it throughout the rehab and will likely hold it as a rental after. Holding funds in escrow makes a ton of sense, especially if the insurance payout isn’t a guarantee. I think that is the direction we will most likely take. 

Would it be out of bounds to hold a high amount in escrow ($20k?) given we don’t know the cost of the foundation repair? Then we would submit actual foundation/tree/roof repairs and any leftover amount would just go back to the seller? Not sure if that’s something that’s even possible.

Thanks again for the advice. I really appreciate it!

Hello everyone!

I feel like my husband and I are in a position where the ball is in our court but we're not sure what to do with it. Apologies in advance for the long post, but I'm not sure who else to ask for help, BP! Thankful for this resource.

We are under contract for a property for $184,000 with seller to pay closing costs. The property was listed in March on the MLS for $250,000, dropped to $240,000 a couple of weeks later and then has been at $215,000 since April. According to our realtor (who is also with the selling firm, more on that later...) there have been no offers on it. This property is located in a fast growing market in a great area but has not been cared for. We expect ARV to be $250,000 and are still finalizing repair estimates but expect these to be $30,000.

I know newbies are notorious for overestimating ARV, underestimating repair costs, and that we are at or near a peak in the market, so I feel I should explain myself a bit further. We know and trust our contractor quite well and this is a very basic, simple home. Built in the 80s, frame, good layout. The area is great-there is more development to happen in the near future and the ARV is based on recent sales. Even if/when there is a contraction in the market this does not feel like a risky amount to plan for-whether we decide to sell or buy and hold.

The major concerns where I feel we have leverage are 1) the roof needs replacing-there is wind damage 2) there is a slope towards the house which needs correcting (we think this can be fixed with a French drain) and 3) there is a giant tree right by the house with roots visible to the slab. We are having a foundation specialist come assess if there is already tree root damage to the slab and if so, we will walk away. But that inspection has not happened yet so let's assume there is no damage to the slab. 

We initially offered $150,000 and the seller was 'offended' but countered at $185,000. We ended up at $184,000 with closing costs being paid and in the contract it states 'no repairs to be made.'

So, my main question is what are our options? 

How can we negotiate for the new roof since insurance should likely pay a portion? 

The home was reported in default in April of this year, and on August 25 Zillow shows that it is in Preforeclosure. I know Zillow is known for having out of date info, but does this mean anything to us since it is recent? The preforeclosure estimate is $153,000. County records show purchase date in 2003 and price of $70,000.

Ultimately, since the inspection, we want to be in the $160,000 to $170,000 range for purchase of this property as long as no major foundation work is needed. 

Given all of this info, do we have anything we can use for negotiation? Can we be creative about building in repair money somewhere for the roof or tree removal? 

***We learned our lesson about finding a better realtor for next time and not going with the same firm as the seller. He has not been bad necessarily and he did submit the $150,000 offer without much push back but I feel like too much could be going on behind the scenes. 

Thank you for the invite @Dustin Davis! I'll be there. Look forward to meeting you and other NWA investors.