Hope Haynes Rehab Deal

 

Hope Haynes Rehab Deal

HRS Property Group in Hope Haynes with Hope and Tim Haynes

We obtained this property from a referral that was given to us by friends from church. The seller of this property had become disabled and unemployed due to health issues. He was unable to continue paying his mortgage and take care of his home. When we contacted him, he had already abandoned the property, and was living in an apartment right down the road. We met with him in the privacy of his home to discuss how we could help him save his credit by paying what he owed to his lender, he would have some money in his pocket at closing, and all the nagging phone calls would stop. Immediately, we saw a depressed and bitter man become relieved, smile, and thanked us. We knew we had made the right decision for us all!

Rehab Details

Property City: Tobaccoville
Property State: NC
Purchase Price: $40,000
Repair Costs $32,000
Sale Price: $129,900

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Case Study

How did you find and structure the financing of this deal?

For this property we used First time Private Money Lenders, in first and second positions. At closing, to start renovation we asked First position lender for Purchase Price of $40k and $20k in renovations. We received the first draw of $10k once $25k in renovations were completed. At second draw we received $10k once all renovations were completed. Second position lender funded the remainder $15k in renovations which was given at the start of the project. In our agreement we borrowed a total of $60k from first position lender, paid 12% interest on the back end of the loan at closing once the property sold and 2 points were paid at origination of the loan. Second position lender funded $15k with no points paid.


Provide a summary of the repairs and improvements you made to the property.

This home was a three bedroom and a one and one half bath. it also had some smoke damage on the ceilings and walls due to an old wood stove that was in the house. We converted the half bath by adding a stand up shower to make it into a full bath. This made two full bathrooms, We had smoke remediation done to get rid of the smoke smell throughout the house. The roof was replaced. As well as, the decking boards and railing were renewed on the back deck. We finished up the outside with all new lighting, exterior doors, and landscaping. On the inside we continued improvements by adding fresh paint and new flooring. In the kitchen we installed all new lighting, granite counter tops and back splash and new appliances. We also had all new electrical and most plumbing was replaced. All toilets, vanities and faucets, mirrors, plugs/outlets in both bathrooms were replaced. We also installed all new windows, added a closet in the Master bedroom to allow more storage space, and created a petitioned wall in the basement to separate the garage and laundry room area. We had all the ceilings scraped and smoothed, painted the fireplace, and pressure washed the siding, brick, and concrete outside to complete the project in order to make the house presentable at showings.


How did you find a buyer for the property if you sold it?

Before listing the house on MLS. We always market our deals on our Business and Personal Facebook page, On Postlets For Sale By Owner site, Craigslist, and other popular social media sites. The new owners actually viewed the house when we had it listed for a short time, For Sale By Owner. However, they were not completely ready to purchase the home. We listed the home on MLS, held it for 6 months due to buyers backing out for different reasons. Finally, the first couple that viewed the house when it was listed as FSBO ended up purchasing it for full asking price of $129,900


What are some of the major lessons learned that you would like to share with other students that they can learn from?

There are always learning curves with every property. This particular project taught us many lessons. We had a stove that was stolen out of the house which taught us to act appropriately in a situation like this. Reacting too soon can cause you to lose buyers. Assess the situation and use your best judgement if it is worth disclosing to the agents or ask them to temporarily delay showings while you replace the appliance, and fix the damage if there is any. Also, be confident in your work and your comps. If an appraisal comes back too low, ask the buyer to make up the difference in the purchase price or let them know that you will have to move on to another buyer.


Shout Outs & Testimonials

Thank you Fortune Builders for creating systems in Real Estate that has helped us have continued success since we began this journey in, 2014. We were able to eliminate Hope's corporate position this year. This has been the best decision we've made for HRS Property Group and our relationship. While we focus on our future goals for our company; we are able to spend quality time together, travel together, and build our relationship with God.




Before & After Photos