First Deal Down - 2 Units in 1 (kinda)
Investment Info:
Single-family residence buy & hold investment in St. Petersburg.
Purchase price: $150,000
Cash invested: $35,000
SFH near downtown St. Petersburg and close to the Tampa Bay Rays stadium. Bought it turn key and completely renovated. House was tenant occupied at purchase and rented for $1400/mo. Has an existing 1 car detatched garage that I am planning on renovating and turning into a STR or a 1/1 ADU to rent out for $500/mo.
All in all if things go according to plan I will have roughly $65k into the property with a refinance with approximate appraisal value of 170-180k and cash flowing $800+/mo.
What made you interested in investing in this type of deal?
Throughout my search I was interested in finding a property that had a larger detatched garage or an ADU already permitted on the property. I knew that if I could get the SFH to work cash flow wise that I could turn the garage or ADU into an AirBnB or 1/1 rental to increase cash flow. The type of property stood out because you could essentially get 2 units for just over the price of 1 based on the condition of the secondary structure.
How did you find this deal and how did you negotiate it?
Found through the MLS. Brought to my attention from my agent (which happens to be a fellow BP member). Took a look at the property and put in an offer just over asking with some cash back. Found out the seller accepted a different offer that was 100% cash so asked my agent to rewrite an offer for 10k over asking with some cash back knowing that even at an increased price it would still cash flow $300/mo. The next day got an accepted offer and off to the races we went.
How did you finance this deal?
conventional investment loan with all cash coming from myself. 20% down at 4.5% over 30 years.
How did you add value to the deal?
Planning to renovate the detatched garage into an AirBnB or 1/1 unit for roughly 30k. Should cash flow about $400-500/mo. Increased cash flow by putting a low amount of money into the property to more than double the initial cash flow.
What was the outcome?
Deal is still in progress. Looking to reno the garage in about 10 months.
Lessons learned? Challenges?
Seems like there's a million cash buyers out there. This was the 3rd deal that I've almost lost to a cash buyer but the property for this one had too good of numbers to pass by. I learned that even if the seller rejects your initial offer that you may have a chance to resubmit given the numbers still work out. I knew what my cap was that I could pay for the property to make sense so I wasnt scared to increase my offer once I knew I was against a cash buyer.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I worked with an agent named Bryce Wade who is also a BP member.
