It was around the end of October/early November when the project finally was wrapping up. We were able to start breathing again.
We were able to enjoy our Halloween and Emily’s second birthday and actually have enough money to celebrate those special days again.
Emily was slow to catch on to what Halloween meant, but as soon as she learned that if you tell people, “Trick or Treat!”, you get candy – she was on it! It was such a relief to be able to relax a little bit and see the light at the end of the tunnel.
So, what is the breakdown?
Purchase price of $68,000 with an original bid of $36,900 for the renovation – we took a hard money loan on the property to build the renovation expenses into that loan. After repair value at the time was $125,500.
Cash to close: $17,593.50
14% interest only payments until the refinance – $1,113.13 per month. 100% expense. Total for the entire holding period: $10,018.17
Utilities expense for holding during that time: $1274.72
ACTUAL rehab cost: $85,598.22 – this house was rotten and, like I said, so many mistakes! After you take out the $36,900, more out of pocket from us was $48,698.22.
Total Cash In: $77,584.61
The good news is once it was appraised, it appraised much higher than we expected it to – and the area is appreciating much more rapidly than we expected. We expect to be able to sell for around the $150K range. After all is said and done, we would have to hold this property for a long while to be able to even come close to breaking even. So, unfortunately we will probably have to cut our losses in a few years and make up for this wasted investment with another rehab, with our lessons learned in our back pocket.
Have you ever just cut your losses on a property? What helped make that decision?
If you have kids, what has been your favorite of their Halloween costumes?
Do you enjoy stories of the crazy things encountered in real estate or facts/figures more?
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