3 Bedroom/ 1.5 Bathroom Ranch House
Investment Info:
Single-family residence buy & hold investment in Pittsburgh.
Purchase price: $50,000
Cash invested: $8,000
3 bedroom/1.5bathroom Ranch home on a double lot. The solid brick house has an attached garage, driveway, and side yard, located on the Northside of Pittsburgh.
What made you interested in investing in this type of deal?
The house fit our criteria for price and equity. The initial cashflow did not fit our usual standards, however we know that this house can and will earn us a good amount of cash flow ($400+) within the next three years.
How did you find this deal and how did you negotiate it?
I found this deal by running my mouth. I tell everyone that I know that I buy homes. I ran into an aunt at a family reunion and she was telling me about a client/friend of hers who may be selling a rental property she had. My aunt made an introduction and we decided on an initial price with traditional financing. That deal fell through because I couldn't secure financing. Several month later, the buyer returned to me and asked if I was still interested. I agreed, but only on seller-finance terms
How did you finance this deal?
Seller financing with ten percent of the purchase price as a down payment. Monthly installments with a balloon due in 18 months.
How did you add value to the deal?
We brought value to the deal by solving a problem. Once we identified the problem, we knew how to solve it in a mutually beneficial manner.
What was the outcome?
We have a strong relationship with the seller and both parties are happy. We have an amazing family who rents the house, and we are looking to have the house in our portfolio for the foreseeable future.
Lessons learned? Challenges?
1. Have a clear timeline for everything. Work backwards from your expected rental date. This will help you understand what needs to be done and when.
2. Communication is key. Never assume.
3. Solving problems is a win-win for all parties. Figure out what people need vs. what they may want, and you can find a deal.