“…It is like a great rough diamond, very well in a closet by way of curiosity, and also for its intrinsic value; but most prized when polished.” – Lord Chesterfield

Almost a year (give or take a few days) after READI acquired our 1st property, we added a 3rd to our portfolio!

After months of unanswered direct-to-owner mail campaigns, a cancelled contract for a 3-property portfolio, and an unsuccessful bidding war at our first auction, an absolute gem of property practically landed in our lap.

Of course, we had to do a little digging and a lot of polishing before we were able to bring the deal home.

The Opportunity

Unlike The Jefferson and The Peel, this 3 bed / 1 bath single family home was not brought to our attention by a wholesaler. But it is because of those properties that the opportunity to purchase it was brought to our attention.

In mid-October, the property manager of The Jefferson forwarded a screenshot that the plumber for The Peel renovation texted her (say that 10 times 🤪). It was a “Property for Sale” advertisement posted in a Shreveport Real Estate Facebook group for the house directly across the street from the duplex! They saw it and thought we might be interested, but didn’t have our contact information to reach out directly.

We contacted the owner right away and hopped on a call. After initial introductions, we learned that he was based in Houston and just couldn’t quite manage the property to its full potential. He would have loved to hold on to it because it was such a great property and he recognized the opportunity in the neighborhood (just like READI!). But he felt it was time to let it go and focus on something closer to his home.

There was already interest in the property from others that had contacted him. But he made it clear — the deal would only be sealed after he had an actual contract in hand.

We got to work right away. Since the home was vacant, we were able to schedule an inspection and viewing within a couple of days. It was lovely! Aside from the spacious, practical layout, it was full of charming elements, including a faux fireplace, lots of natural light, and exposed beam ceilings.

Honestly speaking, the unit was rent-ready. The only major points of concern that needed to be addressed from the inspection was that we needed to replace the HVAC system (due to theft from a prior tenant) and the roof (that was damaged due to tree overgrowth that hadn’t been maintained).

But our mission is to build equity in the neighborhood. We had proven that was possible with the results from the recent appraisal of The Peel. There was no doubt that we could accomplish a decent bump in valuation with an extensive, stylish update.

2 weeks later, we verbally agreed to an offer price and closing time frame! The only thing needed was to formalize a buy/sell agreement, which he committed to arrange with his title company of choice the following week.

Ha! I think we know by now that, regardless of how “straight forward” things start out, the road is riddled with s-curves when it comes to real estate investing…

The Strategy

We offered $39,250 with a closing date for the end of November. The property could have rented for $750/mo. in its current state. But to achieve the valuation we were aiming for, we crafted the following plan:

• Install new HVAC and perform a few minor electrical and plumbing updates.
• Replace all the interior floors, add new appliances, replace doors, and update the paint (wall, ceiling, trim, and kitchen cabinets).
• Overhaul the layout of the bathroom by adding a pocket door, installing a larger vanity, and adding modern fixtures, paint, and flooring.
• Replace the roof and windows.
• Significantly enhance the curb appeal with tree removal, fresh landscaping, exterior paint, a new privacy fence and entertainment deck in the backyard, and front porch/entryway update.

Our target ARV was $150k and a rental rate of $950/mo.

After 1 week, we followed up with the owner with a gentle nudge that we really needed to start the process with our lender to meet the agreed upon closing date. But we were at a standstill because we didn’t have the signed contract.

The owner advised that he had not contacted his title company, but was still on board with the terms we offered. For 2 more weeks, we continued our gentle nudges. With the Thanksgiving holiday season quickly approaching, it became evident that we were going to have to request more time to close the deal since we were outside the original window.

In full transparency, we let the owner know that we needed to change the closing date to the following month. However, that would depend on when he could get the process going to formalize the agreement.

He said no 😣

Obviously, things ended up working out. But you’ll have to find out how The Simone eventually became ours in Part 2 coming soon!