Single-family residence buy & hold investment in Barranquilla.
Purchase price: $20,000
Cash invested: $2,000
For some investors, these numbers look small but it is because of the currency exchange (at that time, I was not in the US). However, If I do a quick change of the numbers using the acquisition power of the money, it will seem like the deal described below:
Numbers corrected by acquisition power.
Monthly Rent: $550 (about 1%)
Annual Taxes: $67 (non-significative)
The estimated raise of house value today is about 30%. Checking prices of houses around.
What made you interested in investing in this type of deal?
I had some money in saving and it was not producing money. The investment was small enough that in worst-case scenario I will be able to pay the financing part from my salary, luckily it payout from the rents.
How did you find this deal and how did you negotiate it?
A family member flip a house there and make a good profit, I decided to buy & hold. I bought this house new in a new neighborhood. I got low-interest finance and a big downpayment 70% of the total price.
How did you finance this deal?
Private loaner (family)
How did you add value to the deal?
Always keep the house in good shape, tenants tend to stay. Better to stop receiving one or two months of rent and keep the people happy.
What was the outcome?
I am getting an ROE of 10% per year through rent. It also helps me to save more because it forced me to put more money to pay out the finance part.
Lessons learned? Challenges?
If you find a deal that is adequate with your financial situation, go ahead. You will be able to pay the debt faster than you believe. Always keep the size of the deal according to your income.
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