I have held back from writing here in the last couple weeks trying not to Jinx myself. I had found a great wholesale property in an area of Maryland that has shown great investment potential in the last year. So, on Friday I closed on my first Rehab project. It is a 3 bed 1 bath single level duplex in Hyattsville, MD. I bought the house for $29,900, am putting $30,000 into rehabbing it. An independent BPO tells me it should be worth $125,000 once I’m done. I will either resell it immediately or if it doesn’t sell at a decent price then I’ll hold it and rent it out or Lease Option it. Properties rent for $1300 in that neighborhood. This is another reason why I think it is a great investment, people in that neighborhood like living there and if they have good credit they can get a mortgage paying less than $800 a month for a nicer place than what they rent. So two strong exit strategies I think.
I have decided to General Contract the project myself because I have done a lot of the same work that is needed on the place. I am going to have another contractor do the work for me though. This contractor has done some work for me and I like what he has done. He is also cheaper than other estimates I have gotten for the project.
I am using private money to fund this project. I learned everything I know about how to use private money to invest in real estate from Patrick Riddle and Trevor at the Private Money Blue Print. I was amazed at how easy it was to do so. I’ll write up a post on exactly how I was able to secure more money than I needed for this deal. I think I have about $300,000 in investors ready to go now. Good stuff!
I’m real excited to be doing this project. I am also real excited to venture outside of my comfort zone.
Thanks for reading and please pray for me to do what is needed and in the right way for this project. Ciao!!
Awesome, Eric! Congratulations buddy. I’m looking forward to following along as you complete the rehab. So just to be clear…you bought half of a duplex and it has 3 bed/1 bath? Way to go with the private money. I’m a HUGE fan of private money
Do you have a long term or short term agreement with the lender if you don’t mind my asking?
By: Shae on August 23, 2010
at 7:31 pm
Hi Shae! Thanks so much! Yes, I bought half a duplex and it is a 3 bed , 1 bath. My agreement with the 2 lenders is a 12 month term balloon note. I used 2 lenders because the first one had some IRA money I told him I would invest in this deal because he is investing my IRA funds in his deals. The second lender actually could have funded the entire deal and more but want to make sure I was returning the favor to the 1st lender.
By: ericblow on August 23, 2010
at 7:38 pm