Investment Info:
Single-family residence buy & hold investment in League City.
Purchase price: $155,000
Cash invested: $26,000
Bank REO that had been vacant for quite some time.
What made you interested in investing in this type of deal?
What interested me most about this type of deal is the location of the property. It's in a well established neighborhood that has and is still continuing to experience a significant rise in property values. I lived in the neighborhood so I am very familiar with the market.
How did you find this deal and how did you negotiate it?
Found this property in my neighborhood 5 years ago. It was a bank REO that had been sitting vacant off the market for over 7 years. I added it to my alerts and when it was finally listed i made an offer. The offer was not accepted and it went pending. A month later it came back to market and I was contacted to see if I was still interested. I informed the seller I was and offered $155,00 which was $10K less than original offer. It was accepted. Persistence is Key!
How did you finance this deal?
Purchased property with Exposure Limit Line of Credit: 90% of purchase price and rehab, ~9% interest, 1 point Interest only for 12 months. Not Bad.
How did you add value to the deal?
Renovation ended up being around $50k so that puts me all in around $205,000. Renovation includes new electrical wiring, all new lvp and tile flooring, new vanities with quartz counter tops
What was the outcome?
Renovation ended up being around $50k so that puts me all in around $205,000. Only weeks after completion I have an accepted lease agreement for $2150 per month.
I am currently in the refinance stage of the BRRRR strategy. ***Cash Invested is after cash out Refi*** After refi I should cash flow around $200-250 per month.
Lessons learned? Challenges?
Initially I purchased in my LLC. The financing terms would negate most of my cash flow and produce an unacceptable ROI.. In order to secure more favorable long term financing I deeded the property to my personal name before beginning the refinancing process.
Also When purchasing vacant properties always budget for the unexpected. After purchase I Discovered all the electrical wire had been stolen from the attic, there I did exceed my initial estimated budget.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes I worked with an agent. Boydeia Glass of Glasshouse Realty.
