Michael Borger Rehab Deal

 

Michael Borger Rehab Deal

Oahu Home Buyers, Inc. in San Diego, CA

I purchased this duplex property in the Kaimuki neighborhood of Honolulu, a very desirable and stable area near many of the island's universities. I reinstated the mortgage to prevent a foreclosure and took over the monthly payments. I then renovated the bottom unit completely and upgraded the upstairs kitchen and deck for a beautiful finished product. My broker sold it on the MLS for full price to a retail buyer who may use one of the units as rental to nearby students.

Rehab Details

Property City: Honolulu
Property State: HI
Purchase Price: $579,600
Repair Costs $49,720
Holding Costs: $78,209
Sale Price: $799,000

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Case Study

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

I acquired this property by contacting the seller who was in the process of being foreclosed upon. The loan modification was not working, and he wanted a better option. I visited the property and got an estimate of the expected renovations. Instead of a complete cash out, we agreed on a subject-to structure using an Agreement of Sale. The seller received a lump sum at the time of recordation and deferred his balance, with interest, until after I renovated and resold the property. I also reinstated his mortgage to good standing and made his monthly payments for him. The funds for renovation and reinstatement came from a private lender whose lien was recorded by the owner behind the existing mortgage.


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

This was a duplex. The downstairs unit was being used as a rental and needed a complete makeover -- paint, new laminate flooring, new bathroom and a new kitchenette. The upstairs unit was in good condition, but we still made some upgrades. We replaced the copper kitchen cabinets with solid wood white cabinets, upgraded all kitchen and bath fixtures and landscaped the backyard. The big sizzle feature we added was a new Trex Enhance deck on top of the carport with beautiful views over the city and the mountains.


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

I listed the property with one of the best brokers on island who got a full price offer within a week of listing. The buyers delayed a couple weeks to get their loan in order, but we settled the deal nicely.


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

I thought I could get away with the current upstairs kitchen cabinets as they were. However, I later acknowledged that the copper look, while interesting, was not going to satisfy most buyers, so I decided to upgrade those as well. If I had included that in the original scope of work, I would have had the property ready for sale much sooner.


Shout Outs & Testimonials

Thanks to FortuneBuilders for teaching me the power of creative financing. This was a tricky deal to put together with the owner finance, private lender and the subject-to framework, but it was a big win!




Before & After Photos