All Forum Posts by: Kimberly Kesterke

Investment Info:

Single-family residence fix & flip investment in Augusta.

Purchase price: $27,000
Cash invested: $15,000
Sale price: $65,500

This property was acquired through pre-foreclosure marketing. I received a call from the previous owner who had let the home go due to her husband passing. She wanted nothing to do with it, so I offered her $1,000 cash plus buying out the remainder of her loan if she would be willing to sell it to me. She was happy because she didn't want it to go to auction and she got something for it. When I walked into the home after closing, I was in for a surprise. It required a good bit of work to turn it back into a safe and habitable condition. For 2 months I worked with very talented contractors to restore the property's former beauty. I listed it for rent and found a qualified tenant within 7 days. Shortly after that I listed it for sale.

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

I wanted to gain more experience in acquiring off-market deals. I sent out a letter campaign to a list of pre-foreclosures for the October 2019 auction. I connected with the owner of 1950 Battle Row and kept moving the ball forward.

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

I found this deal through a pre-foreclosure letter campaign. I negotiated a wrap loan (subject to) structure. I agreed to pay the owner $1,000 since all she wanted to do was walk away from the property. Her other option was to let it go to auction and have a severe ding to her credit.

How did you finance this deal?

I financed it as a wrap (subject to) deal. I had to reinstate the back charges to the loan which cost around $8,000.

How did you add value to the deal?

I restored the property to a safe and habitable space. I also placed a qualified tenant in the property for a 1 year lease.

What was the outcome?

We sold the property for a bit under the 1% rule- giving the investor a qualified tenant, a renovated property and a little more margin in the deal.

Lessons learned? Challenges?

I had to fire my general contractor the second week into the renovation. This forced me to step in as the GC- needless to say I had to burn through some inexperienced contractors to finally find good ones. In the end, the project came out very nice- and have a ton more experience for the next ones.

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

I am licensed agent and had my broker list the property. Everyone I worked with was extremely professional. I would be happy to recommend any appraisers, agents, and contractors in the Augusta, GA area whom I worked with on the project- just DM me if you want more information.

@Jennifer Pauyo

Right here! Glad to connect. Do I sense a female investor forum starting here @ Bigger pockets? ;)

@Todd Powell that’s awesome!!! Great job.

@Jack B.

Charge him a fee for not complying with lease rules. $75 for each violation. Keep records of his correspondence and use it to hold his security deposit if you can’t collect the payment from him before he moves out.

@Joseph Walsh. Agreed. I’m just absolutely shocked at how little tenants are capable of doing. I’m going to re-write my clause in the future and implement a service fee for doing these items for tenants. If the lightbulbs were working upon the move-in inspection, then they should be able to fix them on their own or hire my team to do it for them. 

@Andrew Webster I get where you are coming from. Laws are different everywhere. What about some of the other options that were mentioned in the post? Any of those viable? 

Thank you for the post. This is an interesting thread. 

@Andrew Webster

@Nathan Gesner I appreciate your comment. It is a normal 8-9 ft ceiling. I will make sure to make it more clear in my leases moving forward what is expected of the landlord and what is expected of the tenant. 

I wanted to get your thoughts: 

In my lease, I state that any repairs less that $100.00 are the responsibility of the tenant. I have a younger tenant who is asking me to send someone out to change a lightbulb. I sent over a YouTube video link on how they can do it and she said her step stool won't reach. 

Fellow landlords- while still providing great customer service without breaking the bank- how would you handle this??

Thank you,

Kim

@Michael King I reminded them of the payment process and when evictions would  he filed. Luckily I got paid the rent today. Lesson learned. @Dennis M. yes- this business is not easy- When I follow the right processes things go relatively smoothly. It’s always when I slack on a requirement or cut a corner out of convenience that it ends up biting me. 

@Jim K. Great line- I will certainly use that one.