Other buy & hold investment.
Purchase price: $120,000
Cash invested: $120,000
This property is a rooming house. 13 bed 7 bath. I am turning the laundry room into another bedroom and adding a 1-bed room with 1 bath in the basement. It will be a 15-bed room 8 bath when finished. When covid passes it will have the potential to cash flow really well. I paid cash for it and now I am going to do a refinance to buy a second rooming house. I have a waiting list of about 20 people at all times. I treat my tenants well and in return, they stay and pay on time.
What made you interested in investing in this type of deal?
This deal just kind of fell into my lap because I was doing things for my community and the owners wanted to see me be able to help more people.
How did you find this deal and how did you negotiate it?
The previous owners are friends/ work colleagues.
How did you finance this deal?
How did you add value to the deal?
This house is for individuals wanting to get off of drugs and alcohol. I promised the original owners that I would continue to help people with the property.
What was the outcome?
I got the house for a really good deal. They sold it to me for the same price that they bought it in 2007.
Lessons learned? Challenges?
Closing the deal was stressful because financing fell through 2 days before closing and had to raise the cash but now I'm not scared of the closing process anymore for the most part. Just trying to learn all I can about different ways to put together future deals.
Also, I find that having a house meeting once a week gives them an opportunity to voice concerns and makes it easier to manage. I also have a community cookout once a month. This helps me to get to know my tenants better.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Both parties only had lawyers present.
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