Single-family residence buy & hold investment in Hanover.
Purchase price: $234,000
Cash invested: $12,000
Beautiful newer townhouse I acquired at the county foreclosure auction. Had to wait 60 days to close. 4 months later I ended up renting to a voucher holder in BRHP.org a program for helping qualified applicants move into class A neighborhoods.
This is my second time being a landlord. My first did not work out so well 10 years ago, but now I have renewed interest and a tremendous more amount of wisdom thanks to the wealth of information from all the folks on this site.
What made you interested in investing in this type of deal?
After completing 7 Fix and Flips in the past 3 years, I came to the realization that I needed to start building a portfolio. Now my criteria for acquisition has changed. I still look for good flips. However, my primary goal is to build a portfolio of rental propertied with cash flowing income.
How did you find this deal and how did you negotiate it?
It was a foreclosure auction purchase.
How did you finance this deal?
Private money loan.
How did you add value to the deal?
I immediately removed the all the toilets and vinyl flooring in the upstairs bathrooms and installed tile floors with good caulking to protect the underlying ceilings from possible water damage. Water always gets on the floor when you shower. A well sealed floor helps prevent water damage and mold issues.
What was the outcome?
After listing for 6 weeks, I ended up renting to a voucher holder where the voucher covers the entire rent. Renter is only responsible for the utilities and renters insurance. Let's see how it goes.
Lessons learned? Challenges?
I have been reading many articles here on BP and throughout the internet on best practice for rental properties. I followed a couple of recommendations like adding on site visits every 60 days in addendum. Only a one year lease to start.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
My wife Agne Salgado is my real estate agent. She's very good a leveraging everyone she knows at her Compass brokerage for advice.
I'm cashing out with Daniel Porto of Chase loans. At first I was skeptical that I'd get a good rate considering it's titled as an LLC, but Dan got me a rate that beat all other lenders with 0 points as well.
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