First Rental Investment Property
Investment Info:
Single-family residence buy & hold investment in Augusta.
Purchase price: $85,000
Cash invested: $5,000
4b/2ba 1860 sq ft brick home
How did you find this deal and how did you negotiate it?
Browsed Zillow and driving around the city looking for properties. Viewed about 50 properties before finding this one and it made the most sense numbers wise.
How did you finance this deal?
Conventional loan with 20% down which was a little over $21,000. Did all the repairs with cash and it ended up being about $5,000 total. Mortgage payment is $545 and it rents for $1000
How did you add value to the deal?
Previous owner had partially turned garage into bedroom but was unlivable at purchase time. I finished it which added 400 more square feet. I also made a few cosmetic updates to the rest of the house.
What was the outcome?
Property was rented a week after being listed and cash flows $400 a month
Lessons learned? Challenges?
I learned that I need to hire professionals. I went in thinking all it needed was a little paint and that I could handle it while working a 9-5. I was way in over my head and exhausted by the end of it. It took me four weeks longer than if I had hired somebody.
Most Popular Reply
Hi Jennifer,
I'd suggest reviewing your cash flow numbers to get a better idea of your true income. Yes it is positive $450/mo after mortgage payment but you should also be factoring in maintenance repairs, property taxes, insurance, etc.
Something seems off with your numbers if you are $300/mo cashflowing after you factor in the costs that would be needed to repair roofing, appliances, plumbing etc. and I would also recommend adding in a 3-5% vacancy rate if you want more conservative numbers too.
Congrats though for getting into RE investments and having the confidence to do so