Why I liked it
This deal had really tight margins, but it would keep a good contractor busy with us rather than letting him find new people to work with.
I also had a buyer in mind before starting, so I could save a lot of money on closing costs by going direct.
Deal structure
Hard money lender as the primary and first lien holder, with a private lender to cover the down payment and rehab.
Deal outcome
The property was listed for rent for over a month and wasn’t getting a lot of action, but I was somewhat locked in at the price to make it a really attractive turnkey.
I decided to list it on the retail market and see if I could get another “over asking” situation to cover for the difference in closing costs by selling on the market.
We received 8 offers in the first two days, and all but 2 were over asking. Selecting that offer was actually very challenging because they were all over the place in terms of amounts, financing types and contingencies.
We didn’t choose the highest offer, but the offer with the most favorable contingencies related to appraisals and inspection/repairs.
Projected Numbers
Purchase: $115,000
Rehab: $15,000
ARV: $150,000
Rent: $1,500
Actual numbers
Purchase: $115,000
Rehab: $16,500
Sale Price: $155,000