Before We Bought It
I walked up the driveway to meet the seller, Ernest. He greeted me with a smile and a handshake, and we made small talk as we walked to the door to look at his inherited home. He mentioned that he had a relative renting from him, who recently left, so the place was a little bit of a mess. I said that was no problem because we buy houses in Baton Rouge as is, and prefer when they need some work. He also mentioned he already had an offer for $70,000 from someone in Texas who didn’t even need to see the house. I thought I may be wasting my time looking at it, but I liked the neighborhood and the house looked like it had good bones, so I would check it out. The owner was selling because he faced a decision that many people face when they inherit houses. Fix it up to get it rent ready or sell it.
The first thing I noticed when I walked in is the house was original from the 1960s. The kitchen had custom cabinets, and there was wood paneling on the walls. The carpet was stained, and the house smelled like cigarette smoke. However, the structure looked solid, so I thought it was something we could work with.
We continued our tour, and 20 minutes and several photos later, I had what I needed to make a repair estimate. I thanked him for his time and said I would have an offer for him within two days.
I went home and ran my numbers. I would turn it into a rental, but I wanted it to be high quality so my tenants are happy and stay for a long time. The only way to do that and get close to the amount that his other offer was is by doing the work myself. I offered 68k, because it was the most I could offer and have the deal work. Luckily, he took my offer because he knew we could close with cash, fast, and would do a good job, even though it was a little lower than his other offer.
During the Project
We closed in under 30 days, and he was happy. The next few months we had another project we were finishing, but when we finally had time we got to work. We removed a wall, ripped out the kitchen, prepped the walls for paint, and threw out a ton of debris. My business partner’s parents even came to help out over a long weekend.
A couple months, and countless hours and weekends spent covered in sawdust and paint, we finished the project. We listed it for rent and found amazing tenants who moved in 3 days after we finished. They got a beautiful house for an affordable price, and we are happy with great tenants. This is a house we hope to keep forever, and we installed high quality materials so it should last a very long time.