Houston, TX Case Study
Purchase Price: $85,000
After Repair Value: $155,000
Renovation Cost: $27,000
*Cash on Cash Return: 600%
About The Project

This borrower is a working professional who was interested in pursuing real estate investing to increase cash flow and build long-term wealth for their family.  This deal was sourced through a wholesaler who was motivated to move the property in a short time frame.  Since the borrower could close quickly using hard money, they were able to negotiate to a slightly more favorable price. In reviewing the property, the borrower noticed that it had been remodeled poorly in the past, but had strong bones so some simple cosmetic changes would help to create a very functional property that would attract future tenants.

Roadblocks and Solutions

The borrower added an A/C unit to help increase the ARV, but the breaker box needed an additional circuit breaker which required a permit from the city. Obtaining permits can be tricky in normal times, but doing so during a mass pandemic proved to be extremely challenging and slowed the process down even more. The delay extended the project an additional 4 weeks, but due to the 100% financing provided by Longhorn Investments, the borrower had an extra cushion of cash set aside to handle these sorts of obstacles.

*Formula to determine Cash on Cash return is defined as net cash flow divided by initial cash invested