My first rental property purchase

12 Replies

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,400
Cash invested: $40,500

Townhouse: 2 BR, 2.5 BA

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

This is my first purchase and I wanted the process to be simple, especially since it is 1,200 miles away from where I live. The property is newer (built 2006) with a near perfect inspection report and in a desirable neighborhood. Most importantly, the property should cash flow approximately $2,500/year.

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

I found the property through Roofstock.

How did you finance this deal?

Convential Loan with 25% down

How did you add value to the deal?

No value added. However, I believe it can be converted into a 3 bedroom. Before I sell the property, I will investigate the possibility of converting it to a 3 BR.

What was the outcome?

Waiting for a tenant

Lessons learned? Challenges?

Just as any home buying experience, there are a lot of moving parts. Since this property is out of state I had to rely on the team members to get their piece completed. Overall, the process worked fine with a few hiccups.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Roofstock was a good resource and the mortgage company, Cross Country Mortgage, was easy to deal with

Welcome to the path, Vincent!  Good job jumping in and getting past the single largest hurdle that keeps most people out -- the first deal.

With regards to the inspection report -- how "nearly perfect" was it?  

Curious,

Will

Originally posted by @Vincent Miller :

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,400
Cash invested: $40,500

Townhouse: 2 BR, 2.5 BA

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

This is my first purchase and I wanted the process to be simple, especially since it is 1,200 miles away from where I live. The property is newer (built 2006) with a near perfect inspection report and in a desirable neighborhood. Most importantly, the property should cash flow approximately $2,500/year.

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

I found the property through Roofstock.

How did you finance this deal?

Convential Loan with 25% down

How did you add value to the deal?

No value added. However, I believe it can be converted into a 3 bedroom. Before I sell the property, I will investigate the possibility of converting it to a 3 BR.

What was the outcome?

Waiting for a tenant

Lessons learned? Challenges?

Just as any home buying experience, there are a lot of moving parts. Since this property is out of state I had to rely on the team members to get their piece completed. Overall, the process worked fine with a few hiccups.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Roofstock was a good resource and the mortgage company, Cross Country Mortgage, was easy to deal with

Where is it located?

 

Moody is good area with good schools. With good pre screening on potential tenants you should come out good. I looked at that area 18 months ago. It should be a good long term property. Good luck. JP

Sorry for the late reply.  I just saw these posts.  

Will Fraser, the "nearly perfect" inspection report was as near perfect as anyone could expect.  That is, no repairs were needed.  The property management team evaluated the property the day after I purchased it and the only required/recommended work was a deep cleaning, replacing light bulbs and paint.  The total upfront costs after closing was about $900.  The PM had a tenant in place within 6 weeks of closing!   

John Patton, thank you for confirming the quality of the area.  I did a lot of research and it appeared to be a nice place to live and invest.  I will be "in the hunt" for another property within the next 3 months.  Are there any other towns within 30 miles from Birmingham that you suggest investing in?

Thank you for the nice comments and interest.

Moody is in St. Clair county. Anywhere there should be ok. My cousin's son-in-law is the school superintendent there in St; Clair. Follow the good schools.

Jefferson county Homewood, Hoover, Vestavia Hills, Hueytown, Trussville and McCalla

 Shelby county you have Helena, Alabaster, Calera, Chelsea and Pelham. All have good schools. Follow the good schools. That's were the demand is. Good luck. JP

Hey Vincent, I like what you did for your first property, something newer with less to worry about, is a really appealing way to get started. I am doing the same for my first couple deals before I can find a good contractor so I can start BRRRR investing. Also, curious if you were able to negotiate this good deal, and if you bought a decent amout of equity on purchase?

Hey Nick,  I actually offered the full asking price since the numbers worked for me and it was a relatively hot market.  However, I ended up paying less than the bid price due to it appraising lower than asking.  I offered the appraised price and the seller accepted.   I now have an appreciation for appraisers.  I know that the goal is to purchase below market value, but the numbers worked for me and it is better than sitting around waiting for the deal of a lifetime, which may never happen.  I am happy that I am "in the game" and looking forward to acquiring more cash-flowing assets.  Good luck with your real estate endeavor!
Originally posted by @Vincent Miller :

Moody, Alabama.  It is approximately 25 miles outside of Birmingham

 Nice score Vincent. I figured I drop a nice resource on Bham for you. The Ultimate Guide to Grading Birmingham Alabama Neighborhoods is a nice piece I put together with a large Property Manager down there in Bham. Gives you a great assessment of the varying levels of risk in each neighborhood you look at in that market.

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