This project was managed virtually from the main office in Denver, and run through the Missouri branch of GSP.
The property was acquired via a wholesaler. The intention for the deal was to fix and flip the home. The budget expanded greatly during the rehab. This prevented us from being able to aggresively cut the sales price for the finished home and we were unable to sell the property conventionally without a large loss of capital.
The property was sold via a rent-to-own agreement where GSP will be able to recover capital during the rental period/lease option term and recover our equity during the final sale of the property to the tenant buyers.
Financials
Purchase Price: $55,000
Down Payment: $15,000
Renovation Estimate: $30,000
Renovation Actual: $52,000
Closing Costs (Purchase): $5,000
Refinance Cost (Refi out of Hard Money Loan): $5,000
Interest Costs: $4,400
Miscelaneous Costs (Utilities, etc.): $1,000
Realtor commission on sale: $3,500
Total Cost: $125,900
Sales Price: $129,900
Rent: $1,000/mo.
Cash Flow = 1000 (rent) – PITI ($587) – $0 (self-manage) – $50 (CAPEX/Maintenance) = $363/mo.
ROE (Return on Equity) = 18% Yearly ROE
Lessons Learned on this Project
I wrote about this project and the lessons learned over on the educational blog.
Photos
I don’t have too many before photos.
