It’s crazy…I moved here with the intention that I would be focusing on buying apartment buildings, and after putting together a solid business plan, starting to make contacts with other investors, agents, lenders, etc, it looks like the first investment property I buy will be a single family house (SFH). Don’t get me wrong, I’m certainly not abandoning my aspirations of being an apartment mogul…it looks like I’m just adding to my repetoire.
As I’ve mentioned in various posts over the past week or so, my fiancee has always wanted to do a rehab on a SFH. Talking about it more recently, we have been considering actually starting a business around rehabbing and selling/renting SFH in the Atlanta area. It’s currently a great market to find deals, and I imagine contractors are pretty motivated to find work. But, unfortunately, we have absolutely no experience with flipping houses!
With that in mind, we decided that before we decide to launch a major venture around rehabbing houses, we should probably get at least one under our belt, figure out the process, the intricacies, and just plain learn-the-ropes. Also, with much of the work finished on our own home, and with another four weeks until our wedding, we were looking for a new project. So, we set out to find our first SFH investment property, and after looking at hundreds online, dozens of drive-bys, and twenty or so walk-throughs, today we might have finally found our first property.
And — for good or bad — it’s not your basic cosmetic-repairs-only type property. While there’s likely no major issues with the house, the issues in general run the gamut. Most concerning for us is the fact that there is mold in many of the areas where moisture is most prevalent (bathroom ceilings, around the window frames, basement, etc). While I’m going to ensure that I do my due diligence around the mold problem (and the steps to rectify it) before closing on the property, hopefully this won’t be a show-stopper. Contrary to popular belief, most types of mold aren’t overly dangerous, and unless the problem is quite advanced, clean-up is generally pretty straight-forward.
In addition to that, we’ll likely have to gut the kitchen, do some major bathroom demo, fix some grading problems around the exterior, do some roof work, and to top it all off, finish the basement to add another couple bedrooms and bathroom. All-in-all, a pretty ambitious first project…
Anyway, the guy who found us the deal (an agent, investor, consultant and part-time wholesaler) is going to be putting in an offer on the property tomorrow, and hopefully he can get it under contract for the price we discussed. The property is an REO, so it’s sold “as-is,” but if the offer is accepted, I’ll have a 7-day inspection period, where I’ll be sure to get a thorough inspection from a certified inspector and also get a mold specialist in to assess the extent of that problem.
While I’ve ball-parked the numbers and it seems like a good deal, I have a feeling I’ll be spending much of the next 24 hours putting together a detailed rehab plan and making sure the numbers really work. Unfortunately, I have very little experience in rehab costs, so I’m expecting the Internet will be my friend for much of the day…