My fourth rental property
Investment Info:
Single-family residence buy & hold investment in Georgetown.
Purchase price: $173,000
Cash invested: $44,000
3 bed, 2 bath ranch. 1500 sq ft that backs up to woods and green space.
What made you interested in investing in this type of deal?
My goal was to have purchased two additional properties by the end of 2019, and I needed one more. This house was similar to my other properties and is in a neighborhood that is new and highly valued. Additionally, I learned to add value by charging pet fees and a fee for using the shed. This property has a fenced in backyard which is good for pets and a very nice shed.
How did you find this deal and how did you negotiate it?
I was looking for my next deal and I noticed this house had been on the market for about 60 days. In my market, a house like this usually does not last more than a day or two. I contacted the realtor, and she mentioned that this house was under contract but the financing fell through. I believe most people were concerned about this property because of the length of time it was on the market.
How did you finance this deal?
30 yr. fixed with 25% down.
How did you add value to the deal?
Since I didn't have an agent, the selling agent took 2% off the selling agent fee. Purchasing below market value gave me instant equity. Charging a pet fee of $50/month and a shed usage fee of $25/month enhances my cash flow.
What was the outcome?
I have a 2 year lease signed and payment are made automatically to me with Zillow Rental Manager.
Lessons learned? Challenges?
The couple that is renting this house are newlyweds. They moved from Eastern Kentucky, which is an area of high unemployment due to the downfall of the coal industry. The couple had been living with their Aunt and Uncle until they had enough money saved up for a security deposit. They were so excited about the home. I feel like I was able to give this couple a nice home and a foundation for a the future.
