Purchase Date: 2/22
The Deal:
Originally the seller had 6 properties in a package, they ended up only being willing to sell 5 of the properties. The seller was asking for $235,000 for the package, and I ended up negotiating them down to $220,000. The agreement was supposed to close prior to the end of 2021, but the seller ended up having a lot of title issues that they needed to clear up before closing. The package consisted of three two-bedroom homes, one three-bedroom home, and one five-bedroom home. The properties were all rented and the rents were $500, $550, $800, $500, and $700, two of which were section 8 properties.
How Did We Find The Property?
At the end of 2021, I asked my realtor if she knew anyone selling any homes, I was looking to double our portfolio in one year and we needed 6 more houses to do it. My realtor told me she did have a deal that was 6 houses, which I immediately wanted to pursue. Out of the five properties, four were in areas I was open to, but didn’t have any properties currently. However, I liked that four had basements, three had fenced-in yards, and two of them had garages.
How Did We Fund The Property?
In order to purchase the properties we took out a hard money loan that covered 90% of the purchase price, the remaining amount we had from rents on other properties, as well as using a credit card strategy where we liquidated thousands of dollars to help fund the downpayment. As a result, we knew we needed to get in, rehab several of the properties, and then refinance out of the hard money loan at the end of the six-month loan term.
At the end of the hard money loan, while trying to refinance, we were only able to refinance two of the five properties, because two of the properties didn’t appraise for the minimum loan amount (which was $75,000), and one of the properties I knew wouldn’t appraise, so I never even had it appraised. Once refinanced, I was able to take out enough money on two of the properties to pay off the third property, and the other two properties I had to pay cash for. I didn’t have the $75,000 needed to pay off the final two properties, so I had to wait until two other refinances went through, and once they did, I paid off the hard money loan (with none of my own money) and now own three of the properties in this package free and clear.
This property is one of the ones that did not appraise for enough to get long-term financing on it, so we paid it off using the proceeds of one of our refinances.
How Did We Fix The Property?
For this property we primarily did our standard rehab, except we didn’t swap out the appliances (which were in good working order) or replace the carpet, as a way to save money and the new tenant had a dog, so we decided we would do the flooring after this tenant moves out. We did however paint the entire house, installed ceiling fans in the bedrooms, and new light fixtures painted all cabinets, put in new counters, updated the bathroom, installed an exhaust fan, and updated all the door handles, cabinet hardware, and light switches/outlets/covers, etc.
Before Video:
There isn’t one 🙁
Update List:
- Painted Walls
- Painted Cabinets
- Sanded & Painted all Trim
- Installed New Floors in Kitchen
- Installed Ceiling Fans in Bedrooms
- Installed Exhaust Fan in Bathroom
- Cleaned Entire House
- Installed New Bedroom Doors, Screen Door.
- Installed New Toilet, Mirror, & Storage Racks in the Bathroom