Real Estate | Properties
Money to Close:
After analyzing various deals over the course of 2-3 months, I finally found one where the numbers worked. It was sent to me from my realtor. My realtor did a thorough walk through where he took note of all the items he thought would need repaired, along with pictures and videos of all aspects of the property.
After making numerous back and forth offers, we agreed to a purchase price of $30,000 and we had a deal! The deal was written with a 7 day inspection period and closing to take place in 14 days. I immediately had a reputable home inspection company go out and do their inspection, while simultaneously having 3 different general contractors walk through the property with my realtor to create a bid of all items that needed repaired.
Once I received the GC’s bids and the home inspection report, I made sure to have them add anything that came up that they may not have accounted for. After this took place, I then had 3 bids to look through. They came through at $28,000, $33,000, and $34,000. I did various research on the GC’s and looked through past projects they did to finally make my decision. The dollars and cents mentality told me to choose the lesser of the three. Logic told me to choose the most expensive of the three due to workmanship. Because this was my first property that I invested in and the fact that it was not within driving distance, I ran numbers and ultimately chose the most expensive bid at $34,000. This was mainly due to the character of the GC as well as seeing all of his past work.
Then came closing. I purchased the property through a hard money lender that I found to have the most cost-effective and beneficial loan program. They lend 90% of the purchase price and 100% of the rehab. They do, however, have a minimum down payment requirement of $5,000. So, in essence, you put $5,000 down on any purchase price that is under $50,000, otherwise it is simply 10%. On this property I put down $5,000 for the down payment since it was under their minimum. Closing costs were just about $2,500. I chose a closing company that was recommended to me by my realtor, and who I deemed was a very good company. At closing, I was all in for about $7,500, including the initial $900 earnest deposit.
All of the closing documents get emailed to me at least 2 days prior to closing. This gives me time to look them over, get them signed and notarized, as well as put in the mail for a next day delivery. They then use my signed documents at the closing table.
After closing, my realtor put a lockbox on the property. He then gave myGC the lockbox code and they began working. Here are some before photos of the property. It had significant roof damage that leaked water into the kitchen and through the drywall. Hence the wet floor in the kitchen.
The rehab took a total of about 6 weeks and was only over budget a few hundred dollars, which he waived because of our initially agreed upon rehab budget of $34,000. Here are some of the after photos:
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