The property was located through a direct mail campaign, and the borrowers negotiated the purchase price at a substantial discount with a motivated seller. The borrowers targeted the rental market in Chattanooga for the reasonable entry level purchase prices coupled with the strong cash-on-cash returns to the investor. The renovation budget required various levels of improvements including a new roof, hvac and vinyl wood plank flooring. Additionally, the borrowers gave the house a more modern feel by scraping the outdated popcorn from all of the ceilings and adding a fresh coat of paint throughout the interior.
There were some contractor issues from the beginning, and the borrower noticed the flooring work was substandard. Another red flag to the borrower came when the contractor requested more money than was originally in the bid after the project started. The decision was made to move on to a new vendor that provided quality work in a cost effective manner. Although the borrower experienced frustration and a slight delay to make the switch, the move ended up saving them valuable time and money in the end. The project was completed in a little over two months despite the setback, and the borrower ultimately refinanced into a long term loan while creating some nice cash flow with this rental property.