I love your house would you consider selling it?

[Shuff Mauldin]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000
Cash invested: $20,000

A class 3/2 purchased in 2018 at a discount by simply being flexible.

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

I was looking for small/cute houses I could buy and hold as long term rentals.

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

I had this one on my Deal Machine mail list and they called after getting the postcard. As with every other deal, I asked "how much would you be happy to get for it?" Their response was a price I would be happy to pay, but they needed flexibility with closing. They needed to sell the home in order to buy another. After doing my underwriting, my response was "if we can agree on this price, I will close whenever you tell me to."

How did you finance this deal?

Conventional local bank financing with 20% down.

How did you add value to the deal?

It was not a big value add buy. At the time it was close to a 1% deal based on my analysis but the house was solid. We did end up painting and updating an appliance or two.

What was the outcome?

The house recently appraised for $170k, the current tenant has been their for 5 years, and the current rent is $1,350/mo.

Lessons learned? Challenges?

Before this tenant, the house has had a lot of turnover and therefore, a high vacancy rate. I have always targeted A class rentals but anyone in Laurel, MS who can afford to pay $1,350 in rent can afford a house. So, I have have had nice people but they often buy their own home in a year or so.
I also had to wait almost a year from when we agreed on the sales price, but it was worth it.