In 2009, my Wife and I purchased a Single Family investment property. The SF residence was a 1550 square foot home that was in foreclosure and we were able to purchase it directly from the bank for $45,000.
The realtor provided full disclosure that a new road was coming through and would impact the property in some way. After completed the purchase closing, we spent about 2 months rehabbing the property .
Rehabbing budget consisted of spending $15,000 for new paint, flooring, cabinet upgrades, appliances, and miscellaneous make-ready repairs. After completing the rehab we marketed the property for rent . Short time after we then got a renter in the home. We were so excited once we had a signed rental lease agreement for $825 a month.
A few months ago, we were contacted by the state telling us that our property was needed for right of way for a new road. They were going to take about 1/3 of our property and all of the house.
We just got the appraisal back a couple of weeks ago, and the house appraised for $113,000 (tax value of the home is $95,000).
We will be closing the sale of the property to the state in a few weeks. The state is also paying us up to $10,000 in monies upon receipt for repairs to our new rental property.
When the property is sold and the repairs are done on our new purchase, we will make a profit of $63,000. In addition, we had a positive cash flow (after taxes and insurance) of $715 a month for 30 months (a grand total of rental profit of $21,450).
The lesson we learned is to not shy away from purchasing a property because of future road construction or changes in zoning. What might seem to be a nightmare could be sweet dreams. Thanks for listening and we love real estate investing at Lora Lee Properties.
Mt. Holly, NC