#IPSInvest: Rethinking Real Estate Investing

Part 1 The Deal “Wintrop House”

Our motto at Innovative Property Solutions is “Rethink Real Estate” One of the areas we want to focus on is Real Estate investing. Investing in real estate is often thought of as expensive, complicated, and time consuming but we have streamlined the process. Using technology, personalized strategies and a wealth of experience, IPS delivers a full suite of services tailored to suit your personal investment style.

I’m sure you have heard it all, but we would like to show you what we can do. Over the next two months, we will take you step by step through the IPS process. We will show you just how the deal, the rehab and the rental process are accomplished, so you can see just how to “Rethink Real Estate.”

The IPS process is unique-typically you would need to hire three different companies (A realtor with investment experience, a contractor and a property manager) to complete , but at IPS all you have to do is deal with one company. #IPSInvest

Clients:

Our clients were introduced to us by a previous client. Their parents wanted to invest in a property they could rent out and later retire in while staying close to their daughter and family.

Search:

Winthrop was found online using our MLS search and was being auctioned off by the bank who had recently foreclosed on the property. The property was located in a very desirable neighborhood with excellent schools and a great location. We were able to visit the property immediately, conduct market analysis and come up with a value estimate on the property based on comps in the area ($225,000 in fixed up condition). We evaluated the property for rehab costs and estimated the rehab costs to be approximately $15,000 (we will go more into this in the next blog). We then conducted an analysis of the rental potential and estimated the potential rent to be $1,400-1,500 per month. We based this on our experience of managing several properties in the area.

Based on our onsite evaluation, purchasing this property for under $170,000 could result in a 10% cash-on-cash return and create an instant $40,000 increase in equity even in the worst case scenario. The decision was made to try and acquire this property for less than $170,000 and for as close to $160,000 as possible.

Closing:

The bidding began on the property and after 5 days there was no bid that met the bank’s reserve price. Throughout the bidding process, we managed to strategically remain the highest bidder. As the highest bidder on the property, the bank made an offer to us. After some negotiating we settled for a purchase price of $161,000 -meeting and exceeding our investment criteria.