Single-family residence buy & hold investment in Anna.
Purchase price: $241,000
Cash invested: $72,000
This is a 1900sqft, 3bd/2bth with bonus room for office/kids play room.
Great front patio. Great Back Patio with storage shed on property.
What made you interested in investing in this type of deal?
For our very first rental, we were looking to get a "base-hit" (Thanks Brandon Turner)... Local purchase so we can manage with low to no rehab risk and buy our way into SFH rental market. So we targeted Turn-Key, MLS/On-Market property.
How did you find this deal and how did you negotiate it?
MLS On-Market Listing. We were the FIRST to see the property and first to make offer.
How did you finance this deal?
Conventional loan in my personal name with 25% down.
How did you add value to the deal?
Make ready of the property included minor landscaping improvement, fence staining, pressure wash of property, deep clean of interior, upgrade filtering of HVAC return ducts.
What was the outcome?
This property achieved our goal of Base-Hit. It was a turn key rental... with a $2K make ready budget and 1week to get ready, the property was under contract and rented within first 2 wks of ownership.
Lessons learned? Challenges?
1) Keep track of option period start & end date. Ensure inspection can be completed very early in option period to allow time to negotiate for repairs/fixes.
2) While the property itself achieved good financial results (10% CoC, 20% Avg Annual ROI in 12yrs), the strategy/model of Turn Key / On-Market will not allow us to achieve our REI goal of 30-40 doors in 6yrs. (we do not have enough cash reserves to afford $70K down on every property).
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
My wife (Nikki Peters) is realtor for Coldwell Banker Apex.
Awesome job with the base hit deal glad it's all working out! Loved to see the two week turn around getting a tenant in place, that's terrific news. You guys know what you're doing. Adding to your last comment on not being able to afford the down payments of multiple properties, if you've been on BP for any amount of time you've heard of the BRRRR strategy. I'd consider it moving forward, especially as you continue to learn and network with other investors, contractors, lenders. You'd be able to buy fixer uppers for cash/hard money, then reuse that money/lender indefinitely. Scale your rental portfolio while using recycling your cash, what could be better?! Cheers!
Thanks Kyle for your feedback. You are spot on. My next property (3rd) located in Allen will be a BRRRR with Hard Money followed up with a Cash-Out Refinance. Currently looking for good general contractor recommendation capable of doing flooring, paint, granite countertops, master bath remodel. Any suggestions would be greatly appreciated.
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