First Deal on the books!

[Andrew Woodard]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $245,000
Cash invested: $84,000

Detached single-family home. Rancher with partially finished basement. Half-acre lot with outbuildings for storage. Dog friendly!

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

We (me and my wife) have always had a lot of dogs and have struggled in years past to find places to rent with dog friendly landlords.

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

We found this listing on the MLS very early in our search while we were still building our financial criteria and models. During that time it went under contract. About a month later it was back on the market and we had started touring properties in earnest. Since the previous contract fell through, the sellers were particularly motivated to move quickly and we were able to use the inspection reports/information from the previous potential buyers to inform our decisions.

How did you finance this deal?

Conventional/conforming DSCR loan with 20% down.

How did you add value to the deal?

We did small renovations, cleaning and fresh neutral paints. Upside value with installation of a dishwasher, replaced countertops with brand new granite, and brand new energy efficient windows.

What was the outcome?

House is currently being rented on a 1-year lease to a qualified family with dogs. Cashflow is approximately $675/month after PITI, but before operating expenses. We outpaced "market rent" according to the appraisers by a few hundred dollars by leveraging our awareness of the local market inventory, commuter habits, etc.

Lessons learned? Challenges?

I think we managed to luck out on a lot of small elements of the job. Timing, location, etc. That said, we have learned a lot about how to better estimate initial cash requirements as well as the time required to perform work on our own in the house.

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

Worked with a realtor, Bret Merson, who is also a real estate investor.