Financial Highlights

Initial List Date: April 25, 2019

List Price: $60,900

Initial Offer Date: June 13, 2019

Initial Offer amount: $40,000

Counter Offer Date: June 19, 2019

Counter Offer Received: $53,000

Purchase Close Date: September 26, 2019

Purchase Price: $53,000

Purchase Source: MLS

Rehab Start Date: September 30, 2019

Rehab Completion Date: November 18, 2019

Rehab Amount: $43,500

Appraisal Date: December 23, 2019

Appraised Value: $123,000

Refinance Date: January 16, 2020

Rent: $1,299

Financial Summary

The realization hit that the rehab budget wouldn’t change much. There are bare minimum things we needed to do. Therefore, we had to start thinking, “what number can we change?”

Price will only decrease so much. The rehab budget is remaining rather consistent. What about the ARV?

If we found a property or area with a higher ARV, then we could maintain the rehab amount (or even go higher). 

You’ll notice this is our first property with a higher ARV (area with comps of >$120K).

This is also our most drastic change and longest rehab. Originally estimated for $40K rehab, we did go over. It still, however worked with our desired 80% LTV with our bank.

This was the time where Baltimore City was hit with the ransomware attacks. We were fortunate in that closing was significantly delayed. This additional time allowed us to lock in a great deal, and still have the time to manage all the other tasks (admin, other properties in the portfolio, contractor estimates, etc.).

We utilized 0% credit cards for the rehab. There were certainly pros and cons in doing so.

We learned the hard way when it came time to refinance. Since the credit cards were not debt associated with the property (on the deed of trust or HUD-1) then we could not utilize the debt in the refinance calculation.

We paid off the HML, but left the sweat equity in the deal. Lesson learned for the next one!