Investment Info:

Single-family residence buy & hold investment in Phila.

Purchase price: $170,000
Cash invested: $22,000

Bought a small single family + the vacant lot next door.
Sold the lot a few years later and kept the rental.

What made you interested in investing in this type of deal?

Wanted to keep the ball rolling in this hot neighborhood.

How did you find this deal and how did you negotiate it?

MLS. Didn't negotiate much. Capex had been addressed by previous owner, but cosmetics were due for upgrading.

How did you finance this deal?

FHA 5% down.

How did you add value to the deal?

I gutted and renovated the kitchen and bathroom. The other rooms were fine other than paint.
Previous owner had already replaced roof, mechanicals, plumbing, and electrical.

What was the outcome?

Was originally all in for about 22k.
Cashflow was minimal - more like breaking even.
But a few years in I sold the vacant lot next door to a builder for almost 60k.
Used that money to pay myself back, pay off the remaining student loans for me and wife, then threw a little bit more at the mortgage in a "streamline refinance" to lower my monthly payment.
Rents have increased slowly but surely in that time.

Lessons learned? Challenges?

Cash flow has largely been a wash on this one, but I have all of my capital back. The asset is probably worth 220-250k in current condition (280k with some upgrades) and I owe about 150k on it.
If I could go back in time I would have build a new construction house on the vacant lot myself instead of selling it to a builder. I made money but he also did very well.