Real Estate Investing Case Study | South End Rental + Short Plat

This deal was sourced off market, initially secured with a private loan, then cash out refi with conventional 30 year loan at 4.65%.  Once stable, unit produces ~$1,000 month cash flow.

Real Estate Investing | South End SFH Case Study

Deal Overview

  • Sagareus Advisor purchased this property directly from off market source
  • Initial underwriting demonstrated break even rental + opportunity for short plan
  • Due to quick close requirement, utilized private money only to re-fi later.
  • Download Deal Analyzer Here

Deal Source

  • Off market from wholesaler / broker
  • $270,000 for property and adjacent lot + $10,000 assignment + List Back

Initial Analysis

  • Rent the house
  • Attempt to short plat the backyard
  • Build two houses (total of 3 properties on 1 lot)

Due Diligence

  • Expected $1,800/month rent
  • Confirmed Construction Costs

Financing - How did you fund this deal?

  • Private Loan initially
  • Cash out Refi - $170,000 @ 4.625% 30 years fixed $1,400/month

Stabilization 

  • Spent $20,000 on repair, updated flooring
  • Spent $60,000 on short plat, additional $40,000 expected for street improvements

Outcome

  • After upgrading the house + obtained updated rental comps 
  • House Rented for $2,600/month!
  • Short Plat in process

Lesson(s) Learned

  • Knowing the section 8 system is a competitive advantage

By working with Section 8 program, we were able to secure a long term, stable tenant at full Market Rent. It takes a little more patience to set up with the program. 

  • Short plat takes 1-2 years | $100k

The short plat process takes 1-2 years to complete.  This is okay with the rental property combination, we are not in a hurry.  The recurring monthly income makes this deal good without the short plat.  This is just an added bonus!

 

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