Two Milestones, Two Lessons

We closed successfully in mid-April. A week post-close, the seller was packed but had not moved out yet.

Rather than evicting, we put a 1-month seller lease in place with a deposit and clear move-out terms. He's an Army Veteran so we want to handle this with respect. Rehab starts once we have keys.

Once flipped, this project should generate the expected returns for our private money lenders involved. The comps in the neighborhood support our exit thesis and we're confident in the numbers.

Rehab is done. We're now focused on getting fully leased and getting DSCR refinanced. Cashflow potential sits at $3,650/month once stabilized.

The rehab came in over the original budget. Once we opened the walls, we found more plumbing, electrical, HVAC, and bathroom work than the initial scope showed.

The project also ran during a period of heightened ICE activity in the area, which reduced subcontractor availability. At times, only two workers were carrying most of the job.

Those two factors added both time and cost, and they’ve already sharpened how I approach scoping and staffing going forward.

Leaseback: One practical reminder from this month: "closed" and "in possession" are not the same thing. If a seller needs time in the property after closing, leaseback terms and possession timing need to be clearly structured before the deal funds, not figured out afterward.

Contingency: Conservative underwriting is key. On older rehabs, hidden plumbing, electrical, and HVAC issues can expand the scope quickly, and thankfully, we had already budgeted for this possibility going in.

More deals and updates coming next month, stay tuned!

Interested in learning how to earn double-digit returns with a protected, secured, and insured asset? Reach out to me and let’s chat!

— Jonathan

P.S.: Follow along on Instagram @jonseio for real-time project updates and market insights!