Fleas, blown water lines & a fire (#4)

Fleas, blown water lines & a fire (#4)

DSC_0059 (Small)

Features

  • Single Family
  • 1200+ Square feet
  • 3 bed (Converted from 2br)
  • Foreclosure listed on Auction.com

Financials

  • $25,000 purchase price + $2,500 buyer premium
  • $15,250 rehab cost
  • $480 monthly NOI
  • 14.25% ROI
  • $75,000ARV (~$9,000 in net equity after rehab)

Investment diary

This initially was planned to be a quick rehab with total costs of less than $10,000. It quickly became quite apparent that we had miscalculated the rehab need on the property. The wiring in the home was absolutely terrible and represented a MAJOR fire hazard. In the end we went around $5,000 over budget, then a month after putting a tenant in it had a major water leak that resulted in us spending ~$600 to tear up the sidewalk and replace a underground water line. Additionally after tearing out the ceiling of a room it became appartent that the former owner used something similar to barn siding (which had been burnt severely) to repair a ceiling.

One major value addition to this home was adding a 3rd bedroom on the 1st floor. As it was originally set up it had two living areas. We converted one of the living areas to a formal bedroom by walling it in correctly and adding doors. The cost to do this was a few hundred dollars and allowed us to increase the rent by $100/month.

Overall it’s been a good property for us, but there were many, many , many problems along the way.

  • The main water line to the house blew up not once but twice
  • Our 1st tenant left in October, doing ~$500 in damages to the property
  • Said tenant left a ton of fleas, of which it took us no less than a dozen flea bombs to kill

 

Property pre-rehab photos

Post-Rehab Photos (Look at the kitchen!)