Updated 4 months ago on . Most recent reply
First Residential BURR Rental in Kentucky
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $125,000
Cash invested: $45,000
We bought this two-bedroom, single family property from another Investor that had moved onto larger unit focuses for his portfolio.
What made you interested in investing in this type of deal?
Our daughter was attending a nearby college, so we wanted to avoid paying our rent and opted to buy this property to rehab. This would give her a place to stay while providing a roommate covering 1/2 expenses while she remained in college 3 years.
How did you find this deal and how did you negotiate it?
Contacted a local Property Management company that was servicing the other houses adjacent and found the Owner was the same for those homes. The property was listed at the time in the MLS and negotiated directly with that Agent who facilitated and avoided 3% fees.
How did you finance this deal?
We took a HELOC against our primary home to cover the expenses needed to rehab the property.
How did you add value to the deal?
With rehab, we brought the property closer to $170,000 and added a privacy fence for better renting potential for students. Basic flooring in the bedrooms, painting kitchen cabinets, painting/repairing exterior siding.
What was the outcome?
We have two new renters now and are at least cash flow positive.
Lessons learned? Challenges?
In hindsight, the 2% rule would have made us negotiate a little more on purchase, but we rushed to act based on the location to campus, which is .4 miles. We felt that alone made the investment solid for a future rental.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I would say it is doubtful we'd revisit any of the provided services used for the transaction.
