House #8 It takes more than a kitchen fire to scare me

This house was the ugliest one I've ever purchased

This house came to me before I was even done with my prior house. So I signed the contract and asked for a LONG closing period so I could wrap a refinance from house #7 then I closed on this with that cash. 

My realtor was the property manager on this building when the tenant caused a fire in it. They couldn’t afford to fix it and they didn’t have insurance on the building, their loss my gain. No one else had a chance to get this house because as soon as it was known to be available my realtor called me, and she knows that I CLOSE DEALS. This is why long term thinking and relationship building is so important. My reputation and network got me this deal and it’s one of my best yet.

I did buy it from across the country, my contractor saw it and told me what we needed to do. I negotiated the price and happily took it down. It was very ugly but that doesn’t scare me, in fact that just lets me know other people are scared of it and gives me lots of leverage since I don’t scare easily. 

This deal took a little longer than expected because right in the middle of it a friend brought me a 24 unit apartment complex deal and we closed on that in the middle of doing this deal. I had a lot on my plate at that time but as my friend Shelby says “Take the pressure”. In the end this total deal only took about 4 months from purchase to refinance since we closed the multifamily super fast in only about 2 months.

This post is a little light compared to some of my others but I hope it’s still useful to you and leave a comment if you think that rehab is EPIC! 

The numbers

As ALWAYS I’m going to include my HUD-1 on here so you can see the details of the transaction. 

Remember for delayed finance you want to include rehab costs on the HUD  put the rehab costs on PAGE 2 so you can get those costs back out. Other than that the transaction is simple. Most beginners have never seen a HUD-1 so I like to include it for transparency and understanding. You’re fkn welcome. 

Purchase – $53,500

Rehab – $13,900 

Total – $67,400

Expected ARV – $91,000

Final ARV – $107,000

Equity created – $39,600

Rent – $900

Cash flow (conservative) – $150

Difficulty – Zero, Zilch, Nada

BEFORE

AFTER

Narrative

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Alex Felice

Alex Felice

My name is Alex, I live in Las Vegas and I’m a very high energy, loud, and eccentric guy. I like to talk about things that are high concept and important, no small talk! I like controversy, I speak with conviction, and I’m not a fan of rules. Oh, and I'm super into real estate investment.

3 Responses

    1. Floors and walls are standard for us, and not expensive. Buying in bulk helps

      The big cost saver came from the kitchen not being as bad as it looked. We had everything inspected but there wasn’t much actual damage to electrical or foundation.

      I do have relationship with my contractor that affords me some discounts. I feed him tons of business and I get a little break on mine.

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