This property was listed on the MLS as a single-family home containing 2 beds and 1 bath, all on one level. This property was a much different case than other purchases, as it had already been recently renovated with no additional value-add opportunities. However, due to the below-market-value price, it was a profitable enough investment to have as a turn-key rental. This property had been sitting on the market for quite some time with minimal action, and the assumption is because of the exterior of the home, many people overlooked it without even considering that the interior was newly completed – this is likely why the property was considerably undervalued. With all of this in mind, this property would start at a market rent of $1800 per month.
With a 20% down payment of $42,900, closing costs of $5000, we were all in for $47,900. The remaining $171.600 was financed by a local bank.
Two years later in 2022, we had the property reappraised for $315,000. Keep in mind, there was still no renovations or additional costs incurred – this was just by natural equity growth over time. We refinanced at 80% of its new value for $252,000. This new mortgage paid off the original mortgage in full and left us with $80,400 in our pockets, after only being in the property for $47,900. With that being said, we were net $32,500.
Fast forward to 2023 and this property is worth $350,000, rents for $2,100, and net cash flow is $700 a month. Not to mention that we are now in it without any money out of our own pockets!
This property was listed on the MLS as a single-family home with 6 beds and 2 baths. The main floor consisted of 2 bedrooms, one bathroom, a kitchen and living room area. The second floor had 2 additional bedrooms. The basement consisted of 2 bedrooms, a bathroom, small living space and kitchenette area. The only washing machine and dryer throughout the house was found in the basement bathroom. In its current state, we estimated that it would rent for $2000 per month to a family with young children. After careful review from our team, we discovered that with a few small changes and repairs, we could separate the basement into a suite of its own. This would bring the total monthly rent to $2800 per month. The renovations, which would include a new closet space for an additional washer and dryer on the main floor, an additional door to give separate access to the basement suite, and a new paint job throughout were estimated to be $5,000-$10,000.
We put 20% down and with closing costs and repairs totalling $10,000, we were all in for $68,000. The other $232,000 was financed by a local bank.
With the added second unit, increased rent, and fresh paint, we were able to get it reappraised only 15 months later in July of 2022 for $370,000. This allowed us to refinance at 80% of it’s new value, for $296,000. This new mortgage paid off the original mortgage in full and left us with $64,000 extra in our pockets. Remember that we only put in $68,000 to start. We now own this property with only $4000 left out of pocket.
Fast forward to 2023 and this property is worth $400,000, rents for $2,935, and net cash flow is $1250 a month. Not to mention that we are now in it without any money out of our own pockets!
This property was listed on the MLS as a single-family home with 3 beds and 1.5 bath on the main level and the basement was completely unfinished. The washing machine and dryer were housed in the basement. In its current state, we saw immense opportunity for renovations both up and down; this included new flooring, paint, and fixtures upstairs, and a complete new build downstairs. The basement renovations were to consist of framing in two bedrooms (one containing a large walk-in closet), 1 bathroom, a kitchen area, a laundry room, and full living space, with all of the remaining necessary improvements. Once completed, we saw this property renting as two separate units for a total of $4000 per month. The estimated costs for these renovations for both upstairs and downstairs were $40,000-$60,000.
With a 20% down payment of $82,000, closing costs of $7,000, and renovation costs of $53,000, we were all in for $142,000. The remaining $328,000 was financed by a local bank.
Once the upstairs unit was completed its necessary renovations, we were able to have it rented right away after only 5 weeks for $2500 per month. This allowed us to maintain cash flow while we renovated the downstairs unit. This unit took longer due to the necessary requirements to make it habitable, however, once this downstairs unit was completed, we were able to rent it for $1750 per month. In total, this property is renting for $4250, which is $250 more than we had originally anticipated.
After only 8 months of owning this property, we had it reappraised at a value of $557,000. We refinanced at 80% of its new value at $445,600. This new mortgage paid off the original mortgage in full and left us with $117,600 in our pockets, after being in the property for $142,000 originally. This left $24,400 in the property, however that will be paid down naturally over time through regular monthly cash flow.
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