Case Study

607 Sunset, Suffolk
607 Sunset Avenue, Suffolk, Virginia 23434, United States

Single Family

Property Type

September 2024

Acquisition Date

Holding

Exit Date

Project Overview

REIF bought the house with a long-term tenant in place and kept it rented while the plans came together. When the lease turned, the house was taken down to the studs and rebuilt: new electrical, plumbing and heating and cooling, a rear addition with a laundry room and a half bath, a new kitchen with white shaker cabinets, granite counters and stainless appliances, a tiled full bath upstairs, luxury vinyl plank on the main floor and new carpet in the bedrooms. The house passed its final inspections and received its City of Suffolk rental certificate in October 2026.

The Challenge and  What We Did

The Challenge

  • Bought occupied, with a long-term tenant paying well below market, so the renovation had to wait for the lease to turn
  • A 1925 frame house that needed every system replaced and every finish redone
  • One bathroom and no laundry room in a narrow footprint, which meant building a rear addition
  • Permitting and inspections on an older house took longer than planned

What We Did

  • Bought for $95,000 cash, below replacement cost, and kept the existing tenant until the lease turned
  • Took the house to the studs and replaced the electrical, plumbing and heating and cooling
  • Built a rear addition with a laundry room and a half bath
  • Put in a new kitchen and a tiled full bath, with new flooring throughout
  • Refinanced on a $220,000 appraisal into a 30-year fixed loan, returning $150,825 of cash, and listed the house for rent

Property Data

607 Sunset is a narrow 1925 two-story on a deep lot, the kind of house Suffolk has plenty of. We bought it for less than it would cost to build, collected rent while the plans and permits came together, and then rebuilt it for the long term rather than for the next tenant. The refinance on the finished house returned more than 80 percent of the cash we put in, which is the point of the model: the capital goes back to work and the house stays in the portfolio.

Detail

Information

Acquisition Price
$95,000
Cash Returned via Refi

$150,825

Net Equity in Deal
$21,500
Annual NOI

$16,800

Annual Cash Flow

$3,800

Cash-on-Cash Yield

17.7%

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