Everyone loves to hear a great success story, especially from club members, so please Contact Us with your Success Story so we can share it with the rest of MnREIA.
Mike Jacka
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This is a rehab project we picked up from a wholesaler. Several contractors told us that we should just tear it down, but both Alissa and I could see the potential, where no one else could. So we kept looking until we found a contractor who wasn't afraid of this massive job and who's bid came in close to ours of just under $100k. The contractor got the job done on time and we got the property sold. Ow yah, we also made a nice $40k profit on this one, and the contractor has completed 3 more rehabs for us since then :-)
Adam Hardy (Member since 2013)
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Bought a house for $76,150 thinking there would be about $30k in repairs and it would appraise at $150k. I am a "buy and hold" guy, so my 75% LTV would get me a loan for $112,500 and so I would net $6350 at closing, and still ha
ve a nice positive cash flow each month.
Immediately it was bad. We opened up the walls and realized there was no insulation, also with the walls open, it would need new electrical. Needless to say, the budget went to $40k. Then I got the property inspected for the rental license and that is when I found out the boiler was bad (here's a hint, check the boiler FIRST). After another $5k for the boiler, my all in price is now $121,150.
But then the appraisal came back, and instead of $150k, it came in at $172k. So now my 75% LTV gets me a loan of $129k and nets me $7850 at closing. An additional $1500 in my pocket after spending $15k over budget. Not too bad!
1. The deals are out there! When we send you a prospective "deal", if you're truly serious about building your net-worth....you need to ACT & ENGAGE US for more information. We're sending you news of this story not to boast or gloat, but instead to demonstrate & prove that:
2. We practice what we preach when it comes to investing, comprehensive analysis of "prospective" deals and the coaching we provide for you free of charge.
Before we get too far into these properties, I need to note that in order to realize the gains I obtained you would have to be able to make a purchase like this for cash and re-finance them back out once all repairs have been done. Here below are the details of the deal I speak of most recently.
As mentioned, earlier this year we advertised 4 twin homes that were for sale as a wholesale opportunity in Coon Rapids for $84,000 each. After radio silence from our investor network on the deal I made the game time decision to go ahead and purchase them myself. Two units had renters that were moving out and those units need some repairs. The end-unit it needed paint, a half bathroom added downstairs plus a washer & dryer. One of the other units was in a little rougher shape and needed carpet, paint, washer & dryer, a door replaced, blinds and a few windows fixed. Two of the units had the deck boards replaced to maintenance free composite decking installed. All said and done with repairs, property taxes and insurance I had $88,750 into each unit after acquisition costs & improvements. The rent rates on these properties were previously well-below market at $900 and so I went ahead and raised rent on each unit to $1095.
Again you would need to buy cash whether it is personal money, credit line or partnership and then re-fi cash them out. I recently had them appraised to finance them back out on 9/3 and two units came in at $130,000 and the other two came in at $134,000, totaling $528,000. Now the bank will loan 80% of appraised value or $528,000 x 80% = $422,400. But since I only need $88,750 per unit or $355,000 to pay off the credit line, I was able to get all of my money back effectively having no money down, each unit cash flows $506 a month or total $2024 monthly, and immediate got $173,000 in instant equity. Appraised value $528,000 – actual loan value $355,000 = $173,000.
I wanted to share this with everyone to show you the types of deals we can get you into to continue to grow your portfolio.
Here’s to your investing success!!