Acquisition Details
Bought in: 2018
Purchase Price: $72,000
How I Found the Deal: Eastern NC wholesaler connection. When we were under contract I noticed one set of tenants had not paid rent in 6 months—and the wholesaler did not know this, the property manager did not know this, and the owner did not know!
Rehab: Initial maintenance and siding replacement ($14,958 upfront; & $15,000 in 2022 later)
All-In Costs: $91,964 (purchase + rehab + closing)
Financing: Mortgage from Alpha Mortgage Corporation
Original Loan: $54,000 @ 5.5% fixed, 30 years
Current Loan: $157,500 @ 7.38% fixed, 30 years (cash-out refinance in 2024)
Equity at Purchase: $10,000 (appraised $82,000 vs. $72,000 purchase)
Annual Cash Flow (Initial): ~$2,125
2025 Snapshot
Current Value: ~$295,000
Loan Balance: $157,500
Equity Today: ~$137,500
Net Annual Cash Flow: ~$2,876 (after management, 15% repairs/CapEx, $3,600 taxes & insurance, and debt service)
Lifetime Cash Received: $123,440 (rents minus expenses and capital improvements plus cash-out refinance)
Money Left in the Deal: $0 (infinite return after 2024 refinance)
Performance Metrics
Cap Rate at Purchase: ~8.1%
Cash-on-Cash Return at Purchase: ~5.6% (on ~$38K invested)
Total return: infinite after pulling all my cash out in 2024
Rent History: $800/unit ($1,600 total monthly → $19,200 annually at purchase) → $1,100/unit today ($2,200 total monthly → $26,400 annually)
Lessons Learned
Cash for keys. With the non-paying tenants, we gave them cash if they were moved out on the day before closing. *And if they did not move out we were going to pass on the deal and not close.
Profits increase and work decreases with good tenants. Replacing problem tenants was the first major win.
Always lock contractors into signed bids. Overruns on siding work taught us to add a 20% cushion to every rehab budget.
Renovations can create outsized ROI. A $15K turnover renovation in 2022 added $300/month in rent — a 24% ROI.
Cash-out refinancing can unlock infinite returns. In 2024 we pulled out $100K while keeping cash flow positive and a sub-60% loan-to-value.
The longer you hold, the better the deal gets. We pulled $100K out because we bought right, managed well, and held long enough. Don’t time the market — set clear criteria, buy good deals, manage them, and hold until you get your money back.
✅ Deal #4 was a big step for us. We bought our first off-market deal, did cash-for-keys for the first time, and bought our first duplex where we received two rent rolls for one mortgage. This was also the first property Avery started to manage. We put the budget together, she managed the project and the contractors, and then she built our management systems based on how she managed this property. This deal was a home run for us and is fueling our financial freedom today.
P.S. Repairs and CapEx Budgeting.
If you are trying to figure out what your actual repairs and capex number might be and you are planning on holding your property for 10+ years, I’ve found that a more realistic number is 15% of rent. Lots of people say “Oh it should be 5% repairs” or “10%”, but after tracking my real estate investment numbers since 2011, 15% is a more conservative and realistic number. Some years your maintenance number will be ZERO, and then some years it takes all the cash flow from one property. It’s always better to plan on a bigger number and make more money, than plan on a smaller number and lose money.
P.P.S. If you have tracked your numbers over time and have a different result – please email me so we can talk! I’ve found most people don’t track their financials year over year and institutional companies report low repair numbers (and hide other repairs as capital improvements on their balance sheet). Email me at: schuyler@cedarridgemgmt.com or text me at: 910-378-2642.
