Jo Pascarella Rental Deal

Rental Details

Property City: Chesapeake
Purchase Price: $400,000

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Case Study

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

We put it on the MLS but attempted to find permanent financing to keep as a buy and hold. We received multiple offers with the highest at $575,000. Tough choice make a quick 175k or keep as a rental. Love to have multiple exit strategies. Was going through a private money lender going to put 100k down and finance for 5 years at 10% interest and 2 points. The house on Bishops did not close which provided the 100k so we had to go to a hard money lender with 30,000 down and 70k in 6 months. The points were 3 and interest was 12.5%. It was still a positive 5k per month.

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

Repaired 2 heat pumps so the tenants could have heat. Replaced 2 stove's not working. We are slowly evicting non paying tenants we inherited and rehabbing the property as they move out and increasing the rent. So far we replaced carpet and paint on 3 units. Everything else O.K. Eventually in the next few year must replace roof and old windows.

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

No buyer, but lots of offers.

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

Never depend on a closing and have several exit strategies just in case.