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!
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
Thats awesome. Hows that only a 14k repair job?? Kitchen bathrooms sheetrock paint etc ?
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.
Wow! Impressive rehab with only 14k total cost. Is this the same contractor you had for the previous investments? This show how important it is to have the right people on your side. Bravo!
Yes I think RJ and I started working together on deal #4! Building relationships is more important than any single deal, and it goes both ways. I’ve spent the last few years diligently trying to make him as much money as possible, and have been fairly successful.
Does RJ operate nationally? If so, how do you manage expenses for your contractor when investing on many properties throughout the states? Thank you for your respond Alex