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.
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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!