Buy-Reno-Rent – The plan
- Cash purchase ~$250k
- Renovate ~$45k
- Refinance and pull most cash out
- Lease ~$2400/mo
- Benefit 1: cashflow $6300+ per year
- Benefit 2: ~$100,000 in equity after renovation
Dec. 13 2023 update: rate is 6.875% with 1pt on 30 yr fixed with loan amounts below 200K.
Suitable to a person who is willing to go through the a 2-3 months of renovation time.
This is not your average home, hardwood floors need to be redone and all paper stripped. Pool has been taken care of and it is recommend for long term buy and hold.
The highest home in the neighborhood sold for $400k.
Parents moved out of home and a son was living there and was in a bad car accident so all children are selling.
There are multiple offers on this and they are cash. Offers due Friday.
Excellent area of Kansas City, near the airport, Zona Rosa shopping and about 15 minutes to downtown Kansas City. This is North of the city where Meta and Google will be located!
- Asking is 205k BUT the suggested offer is 250k offer – MULTIPLE OFFERS! ALL DUE FRIDAY
- Estimated renovation needed is $35k-45k: redo hardwood floors, take wall paper off and repair walls/paint. Upgrade lighting and door handles and plumbing fixtures.
- Due to the state of this house it is very likely an appraisal won’t approve it and for that reason cash offer is required. AFTER renovation is completed, reliance can take place.
COMPS
Price/value: Two different models put this house’s values at $135.5/Sq Ft:
- Upper floor sq ft: 2,882 @ $135.5/sq ft = $390k
- Finished basement sq f t: 864 @ $95/sq ft = $82k
Rent
- Upper floor sq ft: 2,882 @ $0.95/sq ft = $2700
- Rent use in the financial model: $2350-$2550
General Notes
ATTENTION ALL INVESTORS, FLIPPERS, AND REMODEL ERS! This home has tons of potential. Carpet was just taken up and has hardwoods throughout. Still has items in the home, and the sellers’ kids are still trying to get it cleaned out. Needs some upgrades and TLC but A TON OF POTENTIAL! 5 total bedrooms but one non-conforming. A dormer upstairs and 1 bedroom downstairs. Inground pool out back has slide and shed. Pool has a new liner, pump, and filter all 3 yrs. old. Roof is 3 1/2 years old. Great bones just needs some updating. Being sold as is. This is not your average home, hardwood floors need to be redone and all paper stripped. Pool has been taken care of and I would recommend flipping or long term buy and hold. The highest home in the neighborhood sold for $400k. Parents moved out of home and a son was living here and was in a bad car accident so all children are selling. There are multiple offers on this and they are cash. Offers due Friday. I have a builder that I would recommend and trust to do all the work! Cash flows at ~$900/mo. when refi’d to 6%. Any other insight you have to this neighborhood or home.
| Financial Analysis / Deal Attractiveness | Years: | |
| 5 | 10 | |
| Net Cash Flow | $31,875 | $81,769 |
| Equity Increase | $97,153 | $217,371 |
| Total Gain | $129,028 | $299,140 |
| Average Cash Flow/Year | $6,375 | $8,177 |
| Average Cash Flow/Month | $531 | $681 |
| Average Gain/Year | $25,806 | $29,914 |
| Average ROI | 106.4% | 246.7% |
| Annual ROI | 21.3% | 24.7% |
| Projected Property Value | $486,661 | $592,098 |
| Property Specifications | |
| Bedrooms | 4 |
| Bathrooms | 2.5 |
| Square Feet | 3746 |
| Year Built | 1967 |
| Garage Size | 2 |
| Schools Rating (scale 3-30, 30 is best) | 15 |
| Lot size (sq ft) | 10019 |
| Purchase Assumptions | My Offer |
| Offer used for analysis | $250,000 |
| Suggested offer (low) | $240,000 |
| Suggested offer (high) | $250,000 |
| Asking | $205,000 |
| Market Value (after improvements) | $400,000 |
| Estimated Improvements (lower) | $35,000 |
| Estimated Improvements (upper) | $45,000 |
| Estimated Closing Costs | $2,500 |
| Estimated Mortgage Costs | $2,013 |
| Other Fees At Closing (pts, . . . ) | $1,750 |
| Total Cost (estimated) | $296,263 |
| Original listing date | 10/20/23 |
| DOM (days on market – TODAY) | 2 |
| Financing Assumptions After refinancing | |||
| Down Payment (%) | 30% | ||
| Down Payment Amount | $75,000 | ||
| Financed Amount | $175,000 | ||
| Interest Rate | 6.875% | ||
| Mortgage Term (Years) | 30 | ||
| Monthly Mortgage Payment | $1,150 | ||
| Cash Outlay (Total Out of Pocket) | $121,263 | ||
| Estimated Financial Assumptions | Monthly | Yearly | |
| Rent (upper)* | $2,550 | $30,600 | |
| Rent (lower)* | $2,250 | $27,000 | |
| Property Taxes | $250 | $3,000 | |
| Insurance | $150 | $1,800 | |
| Repairs | $100 | $1,200 | |
| Property Management Monthly (%) | 7.2% | ||
| Property Management Monthly ($) | $172 | $2,059 | |
| Leasing Fee | $67.5 | $810 | |
| HOA or Fixed Costs | $0 | $0 | |
| Vacancy Rate | 4.0% | ||
| Total Fixed Expenses | $828 | $9,939 | |
| Total Expenses (Fixed + Mortgage) | $1,978 | $23,734 | |
Items need to be checked/confirm:
- If flood insurance is needed (based on FEMA maps it is not needed)
- Detailed budget and scope of work
Rate Updates – Dec 13 2023:
- SFR
- 6.875% with 1pt on 30 yr fixed with loan amounts below 200K.
- 7% with 1pt on 30 yr fixed with loan amounts above 200K.
- 2-4 Units
- 7.125% with 1pt on 30 yr fixed (Duplex)
- 7.375% with 1pt on a 30yr fixed (Tri or 4 plex)
- Updated On:
- January 24, 2024
- Principal and Interest
- Property Tax
- HOA fee
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