All Forum Posts by: Michael Bachmann

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $34,000
Cash invested: $70,000
Sale price: $130,000

This was supposed to be a cosmetic flip that turned into a full-blown rehab project. I bought this property from another investor that ran out of money because he was doing 3 projects at once. Once I really got into the house I realized that 90% of the work that he had done had been half-assed at best.

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

I got this property from Facebook marketing.

How did you finance this deal?

I actually borrowed $45,000 from a private lender who was a friend at 8% interest for the purchase and funded the rehab out of my own pocket.

How did you add value to the deal?

The house went from something dangerous and ugly to the nicest house on the block hands down. We actually got the neighbors to start caring about their own properties and how they looked and how their yards were mowed.

What was the outcome?

Because of multi factors mainly due to incompetent subs it took nearly 7 months of work to finish this house as I ended up doing 80% of it myself which I will never ever do again. There was also a 10-day vacation in the middle of this that was planned a year in advance and one of my subs had 2 epileptic seizures while on the job site which took him out of commission. The house really turned out to be the very nicest house on the block and because we priced in aggressively took 2 months to sell

Lessons learned? Challenges?

No matter how many references a person has always check them....and then double-check them.

Who in Missouri knows the laws for Mechanics liens being filed on a property?

It is my understanding that all mechanics liens must be filed within 6 months of work being finished. I have a lien on a property I am trying to purchase that was filed in early 2020 however the house has been vacant and no work done for over 2 years and closer to 3 years I believe.

If you know the Missouri laws I would appreciate some knowledge and or help.

@Craig Hormes

Just took on my very first Section 8 tenant here in Kansas City Missouri. The Housing Authority has been easy to work with. The comments are correct that people with vouchers take a long time to get and they don’t want to lose that. I’ve yet to get my first check but they even inspected the unit in the middle of the crisis and told me that I would get paid from the day the approval of the unit. I submitted the rental application after they wanted 2 things changed so the tenant and I made the changed and sent the corrected pages back in on Thursday. I am supposed to get my HAP contract on Monday to be signed so I can get the payment.

FYI Section 8 also has a program to help tenants purchase houses as well. I’ve yet to look into that but I sure will.

Michael.

Thankfully every rented paid and said they are considered essential in their jobs. 

I’ve done this in Kansas City Missouri for a few years part time. First off last year at our annual tax sale the largest overage that year was $40,000 over the tax due. How do I know this?  One I bought that house and 2 I attended each day of the sale and recorded how much each sold for. Most properties were less than $15,000 over the total tax due. I use to offer either 60 or 70% of the money. Any overage over $10,000 I charged only 30%. 

I’m not sure what forms or agreements he is talking about but in KC if you are NOT the home owner, you must have an attorney appear in court even if you have a Power of Attorney. That wasn’t a big deal I found one that did it for $100 per case. However starting the second year I did this they required the lawyer and a written statement/ email from the person requesting the refund.  

It’s pretty easy to do this however in KC was a lot of work for the money. The people I helped were very grateful to me. Also in Missouri you only have 2 years to recover the money before the state keeps it.  The process ones you file you get on a court docket which can be from 2 to 4 months out and then if all goes well you get a check about 30 days later  

FYI I figured this out on my own after a friends house was sold after it had been foreclosed by the bank and she got a card sent to her and she passed it along to me. There might be a lot of states that it’s more profitable and easier than KC. 

Best of luck!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $50,000
Cash invested: $87,000
Sale price: $231,500

Tax sale acquisition, a mess. Living room and entry to the left side of the porch and also a great room with fireplace and dining area reached via door in kitchen Gutted to studs, rewired, replumbed, new sewer line. Enlarged windows. Walls were moved upstairs for efficient use of space. Moved the entry from side to front facing. Living room converted to a master bed with walk in closet, bathroom with heated floors and walk in shower. Kitchen was lengthened to about 30' and cabinetry and ap

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

I had not yet done a fix and flip and this house was a good candidate.

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

Jackson County tax sale.

How did you finance this deal?

Cash.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $50,000
Cash invested: $87,000
Sale price: $231,500

This was a tax sale acquisition and was a mess. It had a living room and entry from the left side of the porch and also a large addtion including a great room with fireplace and dining area that accessed the living room through a door in corner of kitchen. Gutted to studs, rewired, replumbed, repairs to sewer line. Installed many larger windows. Most walls were moved upstairs to make more efficient use of space. Moved the entry from side to forward on the front porch. Living room was converted to a master bed with walk in closet and and bathroom with heated floors and walk in shower. Kitchen was lengthened to about 30' and cabinetry and appliances were rearranged and upgraded. 24X16 deck added to rear of house and a slightly larger patio was poored underneath. New roof and siding as well as stone veneer transformed the exterior. Added a 3rd bathroom in the basement near the walkout door to the backyard. Very nice house and sold for highest price on the street.

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

I had not yet done a fix and flip and this house was a good candidate.

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

Jackson County tax sale.

How did you finance this deal?

Cash.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $24,000
Cash invested: $65,000

Property was a total gut to the studs. It had sat vacant for about 5 years with no utilities. It has a high-ceilinged basement which we added a bathroom to. Upstairs used existing hardwoods and pieced more into the kitchen for continuity. Main bathroom has all new fixtures and custom tile. Kitchen has soft-close drawers and doors cabinetry, peninsula, granite and stainless appliances. This house is the nicest on the block and has been rented continuously post rehab.

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

Building rental portfolio.

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

Jackson County delinquent tax sale.

How did you finance this deal?

Cash for purchase and rehab. Pulled money out of property 3/2020.

What was the outcome?

Currently rented at $1,000 per month.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $24,000
Cash invested: $65,000

This property was a total gut and rehab down to the studs. It had sat vacant for about 5 years with no utilities. It has a good sized and high-ceilinged basement which we replaced the windows, moved the washer and dryer area and added a bathroom. Upstairs used what hardwoods we could and pieced more into the kitchen so it was continuous. Main bathroom has all new fixtures and custom tile. Kitchen is all new with soft-close drawers and doors on the cabinetry, eating peninsula, granite and stainless appliances. This house is now definitely the nicest on the block and has been rented continuously since the overhaul.

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

Building rental portfolio.

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

Jackson County delinquent tax sale.

How did you finance this deal?

Cash for purchase and rehab. Pulled money out of property 3/2020.

What was the outcome?

Currently rented at $1,000 per month.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $24,000
Cash invested: $35,000

This property was a total gut and rehab down to the studs. It was on a crawl space and we moved all of the mechanicals to underneath the house by digging down about 4' and adding a sump pump. This was a higher end flip with nice hardwoods with granite and soft close kitchen doors and drawers. We also added a large 12' by 8' deck off the back of the kitchen doors.

You will see this house is really beautiful and its a 2 bed 1 bath with NO garage and rents now for $950 per month.

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

Easy to buy.

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

Bought this at our annual Jackson County tax sale held each August.

How did you finance this deal?

This was bought and rehabbed with my own capital. I just finally pulled money out of this project in March of 2020.

How did you add value to the deal?

Well wasn't hard I wish I could post more pictures. This was a total gut job. Higher end finishes for a rental.

Lessons learned? Challenges?

Don't attempt to start a rehab right before winter sets in when you have not power or HVAC. We were working using friendly neighbors electric and no heat in 10 degree temps outside which meant it was 10 degrees inside.

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

We used Michele Belman Construction to have their people finish the HVAC and drywall work at the end of the project.