Acquisition:

• List Price: $125,000

• Purchase Price: $128,350 (minus $400 negotiated after self inspection + realtor fees)

• Closing Costs: $1,435.75

• Home Inspection: $0

• Annual Taxes: $3,792.01

• Home Insurance: $574.78 (yearly)

• Rehab: $22,714.92

• Closing cost for refinance: $3,465.50

• Holding cost: $ 5,316.57 (includes HELOC interest only payments, taxes, insurance, & utilities)

Total Cost:

• Total Cash Invested: $161,282.74 (plus 4 months of blood, sweat ,and tons of sacrifices)

• Refinance Mortgage Loan Amount: $146,250.00

Total money invested after cash out refinance: $15,032.74

Property Monthly Expenses:

Fixed Expenses:

• Home Mortgage: $636.49

• Property Taxes: $316.01

• Home Insurance: $47.89

• Utilities: $0

Total Fixed Expenses: $1,000.39

Expenses For Reserves

• 3% Vacancy: $50

  • This property rented easily in the first week of listing it, over 50 people contacted us! But it will eventually it will have some vacancy

• 6% Maintenance and Repairs: $100

  • Maintenance and repairs cover things like plumbing leaks, dishwashers, faucets, smaller ticket items.

• 6% Cap Expenditures: $100

  • Capital Expenditures cover big ticket items like replacing the roof,HVAC, water heater, and other things that will break over time.

Total Reserve Expenses: $250

Total For ALL Expenses: $1,250.39

Income:

• Monthly Rent: $1,675

  • $1,675 (Income) – $1,250.39 (Total Expenses) = $424.61

• Monthly Cash Flow: $424.61

• Cash on Cash ROI: 33.89%

• Annual Cash Flow: $5,095.32

Kyle's point of view:

Well, as much as I would like to say I was a rehab master at this point... I repeated some of my previous mistakes from the first rehab, and made some new mistakes-- big ones. I have a habit of doing "calculator magic" and really underestimating how long it will take to do these rehabs. I get impatient and want to buy buy buy. Planning out the rehab and executing the plan is not as easy as I think.

This property was big , it turned into a bigger challenge quick, and took almost every last dollar we had to complete it. Big properties mean more money, more time, and more challenges ahead of you.

Buying off Market issues:

Since it was purchased from a wholesaler it meant we had to do a quick closing: we were only allowed 3 days to get the property inspected (the 2 inspectors I tried were booked 5-7 days away).

So I decided I would just to do the inspection myself (BIG MISTAKE!!!).

These next learning lessons were expensive, but important to learn.

• The water was turned off for a reason (go figure)

• There was some drywall patches in the garage ceiling: found out later the roof had multiple leaks

• The concrete patio was sloped toward the house, which caused water damage to the rim joist, sill plate, sub floor, and floor joist

  • I did notice the patio sloping issue, but did not know the amount of damage it caused

• The roof had missing shingles (they were so high on the roof it was difficult to see)

  • Found this out after it was raining...

• I was able to negotiate a total of $400 off after my inspection

It took 4 hard months to rehab this property...

The hour long drive got old fast, so I started sleeping on an air mattress at the property, coming home every few days to refill my lunchbox. It turned into a rough, grueling rehab and I was starting to regret my decision to purchase the property.

Replacing the roof, paying the electrician, tree removal company, concrete removal company, and ripping apart two bathrooms finding plumbing leaks ate the rehab budget and our savings fast.

There was a lot of low moments on this property; contractors were an issue this time, hardly spending time with my wife, hauling building materials up and down stairs alone proved difficult, pure cold water showers, the stress of running low on money, eating out of a lunchbox for days at a time, playing hide and seek with my tools... I was exhausted.

There were a lot of highs too though: I took on a lot of new challenges with the help of YouTube. Doing things I have never done before, building up my confidence . I discovered some things I really enjoy doing: building the mantle from lumber, epoxy countertops, building the deck and pergola, and tiling the tub surround turned out awesome. I am slowly getting better at this!!! Two people wanted to buy it during my showing!

Kyle's Point of View:

Two months into this house, I started to hate it. Now that it's all over with, I love it.

It's almost all new, so we don't have to worry about any large expenses for a while.

The most important thing: I learned SO much, taking on new projects and the challenges this house brought. I feel like I "leveled up"!! I had victories, and I had lessons.

I took a few months off after finishing this one... :)