1st single family rental in Oz
Investment Info:
Single-family residence buy & hold investment in Osawatomie.
Purchase price: $70,000
Cash invested: $19,200
This is a single family, modular home with an attached garage.
What made you interested in investing in this type of deal?
This is my first property and the current renters came to me because they heard I wanted to buy investment properties. Their land lord was wanting to sell the house they were living in and they didn’t want to move. I contacted the land lord and he did want to sell and said the current renters had never been late and were great renters.
How did you find this deal and how did you negotiate it?
The previous owner and I worked everything out together without having to use a realtor. I went and looked at the home and found everything wrong with it I could and calculated the cost to fix it. I knew what the renters were paying and used that to come up with my starting point. Then subtracted the cost of repairs, plus a little cushion. Then I made my offer below my “max buy” number.
How did you finance this deal?
I financed this through traditional lending 20% down and 15 year term.
What was the outcome?
It really helped being able to work with a current investor, because he understood my point of view as the buyer and a new investor. We were only $5k apart when we started and after the inspections we agreed to my original offer.
Lessons learned? Challenges?
The day before we were supposed to close, the mortgage broker I was working with called and said the load had been declined because the house was a modular home. I learned that modular homes, even with attached garages are still modulars and to make sure the lender knows that up front. Modulars are not trailer homes but go have their own challenges.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No