1020 16th Ave SW
Albany OR
Executive Summary
Deal Highlights
Purchase Price
$160K
Hold Period
9 months
Stabilization Cost
$131K
Total Project Cost
$234K
Investor Loan
Interest Rate
Interest Rate
8%
A $50K Loan Returns
$4,000
After Repair Value
$289,900
Deal Story
We are seeking a total of $131,000 to fix and flip this 983SF house with 3 bedrooms and 1 bathroom. It was built in 1942 near Queen Ave and needs some TLC.
The seller is in pre-foreclosure with $40,000 in arrears. He has two loans, and the lender in the second position called the entire note due. And since he couldn't make his monthly payments, he can't pay off the $40,000. He's in a tough situation!
By working with us, he'll save his credit, earn enough money to buy a more affordable house, and have some more time to move out. We can't solve all of his issues, but we're happy to help in this small way.
Part of the stabilization costs will go towards paying off the arrears, putting some cash into the seller’s pocket, and rehabbing the property. We’re also giving the seller 90 days after close to find a new, more affordable, home (hence the 9 month hold period). During that time he’ll continue to live there and we’ll schedule the construction crew.
Rehab Project Plan
Replace the roof and repair damaged/moldy drywall due to water damage.
Replace all flooring.
New inside and outside paint and fixtures throughout.
Replace the electrical panel cover.
General cleaning, yard care, and repairs in preparation for a sale.
See below for a detailed scope of work.
Sources of Funds
Existing Loan $92,000
Investor Note $131,605
Total $223,605
Uses of Funds
Purchase Price $160,000
Closing Costs $2,500
Rehab / Holding Costs $58,000
Mortgage Payments $3,105
Total $223,605
Investor Note Interest $10,528 (8%)
Total Project Cost $234,133
Key Dates
PSA Executed
March 4th
Funds Due
March 15th
Close Date
March 18th
Property Overview
Facts and Features
Size: 983 SF
Beds: 3
Baths: 1
Vintage: 1942
Lot: 0.11 AC
Heating: cadet wall heaters
Cooling: window-style AC-unit
Hot Water: Electric
Additional Resources
Business Plan
Risks
The sellers refuse the move out after 90 days. To mitigate this risk, we're not using a standard rental agreement. We're tying their tenancy to the purchase & sale agreement. The benefit is that we don't need to follow tenant-landlord laws and can forcibly remove them if needed. This is not our hope! So, we will also actively work with them to find a new home.
The rehab costs more than is budgeted. We have three ways to mitigate this risk. First, we're working with a contractor who likes us and has done hundreds of flips. Second, the budget is fixed, so we can be flexible on the timing and quality. Third, James and Lawrence have construction experience and can do the work if needed.
The After Repair Value is lower than expected. We completed a Competitive Market Analysis (see it here) to determine a value. We also have enough profit built into the deal to be off by 10% and still break even. Plus, we have additional personal funds to ensure our investors get paid.
Construction Plan & Budget
The following repair estimates are provided by EstimateON (the leading provider of insurance repair data). From past experience, these estimates align closely with our contractors. You can see the full repair estimate report here, which includes various quality options and a breakdown of labor and materials.
Here's a summary of the repairs and their cost range. We also included a 10% contingency.
Financial Projections
The Team
James Furlo
Sponsor
After getting his MBA, Mr. Furlo started working for HP Inc. and actively investing. Over the last 14 years, he purchased over $4 million in real estate. His investments include 10 properties that span apartments, storage, and warehouses. He's also a limited partner in a 112-unit development project. Learn more
Lawrence Potts
Sponsor
While working as a logistics coordinator & warehouse manager for Tigerlights in the agricultural industry, Mr. Potts invested in real estate in Oregon and Louisiana. He also started a Junk Removal company. After successfully selling his Louisiana portfolio and Junk Removal company, he became a full-time real estate investor and broker.
Mr. Potts has flipped several residential properties and continues to pursue specialty value-added opportunities. His focus is on always creating win-win scenarios and fostering long-term relationships. Learn more
Aaron Fulcher
Contractor, Basecamp Construction
Mr. Fulcher has a passion for helping people navigate their real estate journey. He has been specializing in buying, remodeling, and selling residential properties since 2012. To date, Mr. Fulcher has helped hundreds of clients remodel their dream homes.
Next Steps
Critical Dates
PSA Executed
March 4th
Funds Due
March 15th
Close Date
March 18th
How To Invest
Call, email, or text either James or Lawrence expressing your interest. We'll sign an initial term sheet and send you the wiring instructions.
Frequently Asked Questions
How do I invest in the deal?
Let James or Lawrence know, and we'll send you the wiring instructions to the escrow company. Since the sellers aren't moving immediately, we don't need the full rehab budget right away. We'll be in touch on the exact amount and timing.
Can I invest using a self-directed IRA?
Yes. Investments are accepted via 401K/IRA funds.
What is the minimum investment/loan?
$25,000
Where do I find the banking wiring information, and where is this entity located?
The wiring information is provided after we sign the initial note agreement. If your bank asks, the entity's location that will purchase the property is in Corvallis, OR.
When will the loan be paid?
You will be repaid, including interest, after the property is resold.
How much are the Sponsors investing in the deal?
The Sponsors are providing the earnest money ($100) and will provide any additional funds required to either complete the project or make sure investors are fully paid.
What does "straight interest" mean?
This means you'll earn 8% regardless of the hold period. So, if we finisht the project is in 6, 7 or 10 moths, you'll get paid the exact same amount.
What is the projected hold time?
9 months. The sellers have 3 months to move. We'll take 4 months to rehab the property and market it for 2 months.
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