New Construction Townhouse - LTR

[Sean McDonnell]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $137,500
Cash invested: $40,000

We purchased a new construction townhouse in Holly Ridge, North Carolina. The townhouse is an end unit, 2 bed, 2.5 bath. We had it under contract for over a year because the builder kept experiencing delays. The wait was worth it because thankfully he did not raise the prices on the buyers. We closed at $137,500 and our awesome property managers had it rented out a few days later at $1,535 a month. These townhouses are now worth around 190k. We love this area and believe it will continue to grow

What made you interested in investing in this type of deal?

Wanting to buyer newer properties with less maintenance up front.

How did you find this deal and how did you negotiate it?

It was on the MLS

How did you finance this deal?

Conventional 20% down loan

How did you add value to the deal?

We didnt add value, the market added value during the period when it was under construction

What was the outcome?

We are cash flowing a couple hundred a month and will hopefully not have any major maintenance headaches for the first few years.

Lessons learned? Challenges?

Trust the rent growth numbers. The numbers were not great when we got it under contract a year ago. We were only estimating around 1100 a month in rent but rents have gone up 20% since last year.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Cedar Ridge Management is our property management company that does a great job!