All Forum Posts by: Nicole Fay

 Thank you so much Todd for your kind words! We are very blessed and excited with how well this worked out and we hope it helps propel us forward into our next deal. What have you found to make the best impression on a kitchen transformation? Do you complete the renovations yourself?

Thank you!

Investment Info:

Single-family residence buy & hold investment in Palmyra.

Purchase price: $140,000
Cash invested: $40,000
Sale price: $335,000

My husband and I took a property under contract for roughly 6 months to renovate the property and remove condemned buildings and then were able to purchase the property with a conventional mortgage. The purchase price if we could get a mortgage was agreed to at $140,000 and if we were not able to we would have been paid $25,000 for the improvements we had made to the property. We acquired the property as our primary residence with a conventional loan for the $140,000.

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

This deal was a great way for my husband and I to get started in real estate investing. We were able to purchase a home that we would use as a primary residence for the time-being while also allowing us to build equity to leverage in our next real estate purchase.

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

Networking through family and neighbors we were able to find this deal. This property was only a few houses up from my husband's parents and his brother's family. We were able to negotiate this deal as it was an estate in disrepair. We were able to draw up a contract that allowed us to renovate and fix the property in order to obtain a conventional mortgage. The family was willing to work with us as we were neighbors.

How did you finance this deal?

We were able to obtain a conventional mortgage for this deal with 5% down. At this point we did not have a primary residence, so we decided to take this property on, for now, as our primary residence so that we could leverage it with the use of a DSCR loan later down the road.

How did you add value to the deal?

Through sweat equity we were able to fix this property up. My husband is a licensed and insured contractor, so we were able to lean on his expertise to tackle this renovation. There was a great deal of termite damage in addition to the interior being outdated. The exterior had 2 condemned buildings that we also removed.

What was the outcome?

In updating and renovating this property we were able to take a HELOC out on this property to move into our next real estate investment. We purchased the property for $140,000 and the appraisal came back (April) at $335,000 providing us with a line of credit of $140,000. We made double payments on our mortgage since we acquired it in October which brought the principle down to $130,000 and allowing us the larger line of credit.

Lessons learned? Challenges?

We learned a LOT about termites and termite damage. We did have an inspection completed, however, even the inspector did not realize the extend of the damage until we started renovations. We learned that completing this renovation, in addition to our full time jobs, that we had no or very little free time but we were able to complete the project in about 6 months.

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

As a real estate agent I was able to help provide the necessary information regarding the property, its current value, and potential ARV. My husband as a licensed and insured contractor was able to direct me in ways I could assist and complete the necessary work needed for the full renovation.

Investment Info:

Single-family residence buy & hold investment in Palmyra.

Purchase price: $140,000
Cash invested: $40,000
Sale price: $335,000

My husband and I took a property under contract for roughly 6 months to renovate the property and remove condemned buildings and then were able to purchase the property with a conventional mortgage. The purchase price if we could get a mortgage was agreed to at $140,000 and if we were not able to we would have been paid $25,000 for the improvements we had made to the property. We acquired the property as our primary residence with a conventional loan for the $140,000. After finishing most renovations we had an appraisal completed and the property appraised at $335,000 and we are able to use a HELOC up to a max of $140,000. We plan to use this available credit toward our next real estate investment.

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

This deal was a great way for my husband and I to get started in real estate investing. We were able to purchase a home that we would use as a primary residence for the time-being while also allowing us to build equity to leverage in our next real estate purchase.

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

Networking through family and neighbors we were able to find this deal. This property was only a few houses up from my husband's parents and his brother's family. We were able to negotiate this deal as it was an estate in disrepair. We were able to draw up a contract that allowed us to renovate and fix the property in order to obtain a conventional mortgage. The family was willing to work with us as we were neighbors.

How did you finance this deal?

We were able to obtain a conventional mortgage for this deal with 5% down. At this point we did not have a primary residence, so we decided to take this property on, for now, as our primary residence so that we could leverage it with the use of a DSCR loan later down the road.

How did you add value to the deal?

Through sweat equity we were able to fix this property up. My husband is a licensed and insured contractor, so we were able to lean on his expertise to tackle this renovation. There was a great deal of termite damage in addition to the interior being outdated. The exterior had 2 condemned buildings that we also removed.

What was the outcome?

In updating and renovating this property we were able to take a HELOC out on this property to move into our next real estate investment. We purchased the property for $140,000 and the appraisal came back (April) at $335,000 providing us with a line of credit of $140,000. We made double payments on our mortgage since we acquired it in October which brought the principle down to $130,000 and allowing us the larger line of credit.

Lessons learned? Challenges?

We learned a LOT about termites and termite damage. We did have an inspection completed, however, even the inspector did not realize the extend of the damage until we started renovations. We learned that completing this renovation, in addition to our full time jobs, that we had no or very little free time but we were able to complete the project in about 6 months.

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

As a real estate agent I was able to help provide the necessary information regarding the property, its current value, and potential ARV. My husband as a licensed and insured contractor was able to direct me in ways I could assist and complete the necessary work needed for the full renovation.

 David that makes complete sense!  Thank you SO much for taking the time to share that with me.  I greatly appreciate it.  Cash to close and closing costs are indeed two different numbers and I see that now.  Thank you!

 Collin,

Thank you for the advice and feedback! The estimate included an itemized break down of most of the "fees" but I felt it was still fairly high - however that may be the "price to do business" outside of the deal I am analyzing.

Hello! I am a new real estate agent and new into investing with my husband. We currently have a property (SFH) under contract that we are currently rehabbing and plan to rent out. We are enjoying the process so far and so I am starting to look for other deals and analyze them as rentals using the BP Calculators and tools. So far, it seems that the rent estimator is conservative for our area (Palmyra PA - Lebanon County). I am loving the rental property calculator to see if listed properties could be a good deal. I used the rental calculator however for the deal we are currently in and this is where I started to get confused. We have the house under contract for $140k and we are getting a conventional 30 fixed year mortgage with $7,000 down being our primary residence (not an investor mortgage). According to the calculator it says that closing costs should be 1-2% of the purchase price - so on the high side $3,000. We have two mortgage lenders that have quoted us and the closing costs for each - not including the $7,000 down - are both around $10,000. I have attached an image of one of the quotes for closing costs. What am I missing? I don't want to be analyzing deals incorrectly and get in way over our heads. I greatly appreciate your help, insight, and experience!

-Nicole :)