Single-family residence buy & hold investment in Durham.
Purchase price: $60,900
Cash invested: $9,694
This is the one that started it all! I told my wife that I wanted to finally buy that rental property that I had been talking about getting into for all those years. My schedule now had enough free time to do so and I had the 20% down-payment ready to go. I started looking and came across this 2BR / 1.5 BA Townhouse in the Peppertree Community of Durham about 25 minutes away from my house - and although it needed some work, I thought it was perfect!
What made you interested in investing in this type of deal?
I liked the idea of starting out with a Townhouse, because it had a reasonable HOA fee; but I knew the HOA covered common area and external maintenance items like the roof, siding and parking lot.
How did you find this deal and how did you negotiate it?
It was found on the MLS and it was my first and only property purchased prior to my later getting my own Real Estate Broker's License.
How did you finance this deal?
I had funds that I had saved in my business (I'm self-employed) to make this purchase at 20% down, with 80% coming from Quicken Loans. However, they would not allow me to use these funds from my business. So I ended up taking a loan from my wife's TSP account (which they would allow me to use); and then I paid the TSP loan off with those same business funds after closing.
How did you add value to the deal?
I estimated that it would require $3,000 to be rental ready... But it actually ended up costing over $9,000. I've not since underestimated my rehab budget by a factor of 3.
What was the outcome?
My first tenant that I put into this property is still there to this date - 4 years later! I was very fortunate to have started out my Landlord career with such a great first tenant. And I've since gotten 5 additional units within this same community.
Lessons learned? Challenges?
I learned a lot on this project and started to build my team, such that I was able to do the next one (less than 6 months later) for a much more cost effective price.
@Jonathan Taylor Smith Congrats! I like how you took the lessons you learned on your first investment property to heart.
Congrats! Thanks for sharing. I'd be curious to hear about the returns on investment you are getting in this community, if you wouldn't mind sharing that as well :-) I've mostly written off trying to find investments in Durham since the market is so hot and the price-to-rent ratios aren't so great, but it looks like you've found something that works.
I’m in CA and am working with a realtor there for some rental properties. The lender she recommended hasn’t been very responsive so I need to look elsewhere as I have a house I want to put an offer on
Also @Jonathan Taylor Smith do you remember what the numbers were when you first got into the townhome?
@Austin Largusa I'm just starting out but have gotten some recommendations for Coastal Credit Union, and from speaking with them so far I think I'll be happy with using them for a refinance I'm doing on the property I'm currently working on. Not sure how well they'll work for out of state investors but maybe worth looking into.
Congrats! I always love hearing people's success stories and how they got started.
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