Single-family residence buy & hold investment in Millington.
Purchase price: $52,000
Cash invested: $4,000
This property was listed at $48,700, but it was a good deal up to about $60,000. We won the highest bid at $52,000 by just $500. House next door was flipped in 2018 and sold for $94,000. The house was immediately listed for $900 and looks like it was rented at that amount since it has not been relisted since.
After reaching a sale agreement we inspected the home, and rehab needed was very minimal. We repainted the outside of the home and cleaned up and painted parts of the inside of the home. Put new knobs on the kitchen cabinets, and replaced some broken soffit pieces and window sills that had rotted out.
I used a heloc to buy the home and will be refinancing it out on a 15-30 year mortgage to increase the cashflow. I am getting an appraisal soon, with estimated ARV at $100,000 , which means my equity in the home will be over $44,000.
This home is currently rented at $900 per month. Tenant does own lawn maintenance.
What made you interested in investing in this type of deal?
This was my first investment and I was excited when I found it on the MLS- it was a steal! It didn't need a lot of work and the area is pretty good because it is close to the naval base.
How did you find this deal and how did you negotiate it?
Found the Deal on MLS. It was priced way under-market and I bid over the asking and won the bid with a cash offer at $52,000.
How did you finance this deal?
I used my HELOC from my personal home.
How did you add value to the deal?
We repaired soffit and rotted siding that was broken, cleaned the inside and painted the exterior of the home.
What was the outcome?
Successful rental within 2 months of closing on the home, tenant is paying on time and is happy with the home.
Lessons learned? Challenges?
I learned to have the workers lined up to do estimates on repairs to the property as soon as you close so that the work can be done ASAP. Also learned a LOT about how to screen and manage tenants and contracts. I also learned to get the details on the water/electrical before putting the new tenant in and put a clause in the contract that they have to get it switched over or else there will be fees. Lastly- put a line and fee in the lease about tenant getting locked out of the home.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, my agent James Little was fantastic!
Congratulations! I think there are more deals on the MLS than most people realize. They sit because people can't analyze properly or they can't think outside the box. Keep it up!
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