Bought my 1st Rental Property!
Investment Info:
Single-family residence buy & hold investment in Raleigh.
Purchase price: $194,000
Cash invested: $27,500
I bought this property as a buy and hold investment. What I like about it is that it's a ranch style home with 3 beds/2 full baths and has a large, private, fenced in yard. I anticipate in the next 5 years for it to appreciate about $40k-$50k. I listed it for $1,450/mo. and got multiple applications within the 1st week on the market and b/c of the great updates to the kitchen, bathrooms and awesome outdoor yard space I ended up getting $1,500/mo. I am using a PM to market and manage the property
What made you interested in investing in this type of deal?
I was looking for a 3/2 under $200k in the Raleigh, NC market when this one, which was outdated, was sitting on the market for a while.
How did you find this deal and how did you negotiate it?
It was on the MLS for about 30 days before I put in my offer. Because I'm a Realtor, I repped myself.
How did you finance this deal?
Conventional Financing.
How did you add value to the deal?
Full interior paint; Added new hardware, light fixtures and fans throughout the home; New granite counters in the kitchen and bathroom vanities; New appliances, tile backsplash in kitchen; Full renovation of both bathrooms including tubs, vanities, hardware, tile surrounding the shower wall and custom, moroccan tile on the floor in the owner suite; New gutters.
What was the outcome?
My goal was to complete the project and begin marketing it within 4 weeks which I was able to do. It was on the market for an additional week before accepting a tenant who moved in the last week of October. I'm getting $1,500/mo. in rent. Mortgage is $916 and PM is $150 (10%) and so I cashflow about $434/mo.
Lessons learned? Challenges?
You gotta stay on top of contractors and communication is so important.... Having the work itemized per contractor was definitely beneficial to all parties involved. Probably the biggest challenge was timing- Since this was my first rental property, making the design selections took up the most time- Especially the appliances! Because of everything with COVID and things being out of stock, it was difficult trying to coordinate everything.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I repped myself as buyer's agent. Dan Stanton, of The Mortgage Firm was my lender. Jon Anderson, of City of Oaks Law, was the closing attorney. Shaun Adams, of SJ Adams Insurance, insured the home. All 3 of these professionals I have been recommending for over 8 years. Will Spence, of Acorn + Oak is my PM and is phenomenal! Contractors used: Paint/Handyman- Tony Silva; Tile: Luis Laba (LABA Tile) and Juan Romero did granite install.
