Investment Info:

Single-family residence buy & hold investment in Narragansett.

Purchase price: $300,000
Cash invested: $50,000

GFour bedroom raised ranch. Niche rental community near University of Rhode Island. Rent to students Sept-May and weekly in summer. Closed 11/6/18, renovated and rented to students 1/1/19. This June, will add a fifth bedroom and rent weekly during summer and next school year. URI rentals are per bedroom, so adding bedroom (~$5000) will easily add value to the home and increase the monthly rent during the school year by $600/month.

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

I am familiar with the market, as I lived there for a few years and was a realtor in town for a short time before moving to MA.

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

Found on the MLS. Offered low due to mold issue and days on market. Went back and forth a few times and walked away at one point. A few weeks later the seller reconnected and we settled on a price that worked for my initial investment and cash on cash #s.

How did you finance this deal?

Traditional mortgage, HELOC on primary residence for down payment and reserves.

How did you add value to the deal?

Adding fifth bedroom in June. Remediated mold, replaced flooring and replaced five windows to meet egress code for rental.

What was the outcome?

Closed 11/6/18, rented to four students 1/1/19. Had rent checks in place before I made a mortgage payment.

Lessons learned? Challenges?

-Book the locksmith the day of the closing. (long distance rental, would have saved me a trip)
-Be nice to everyone. The Sat after the closing, I arrived to find a flatbed towtruck in my driveway. I could have chewed him out, but I didn't. We chatted, I let him park there until my renters moved in - and he referred me a lawn, heating, electrician.
-Take every chance to talk with other investors. Going to lunch with my realtor, mortgage guy after the closing was invaluable - learned about BP!

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

Alex Frioli and Nick Hayes, Edge Realty, Narragansett RI. They know the market and are investors themselves.
Rob Cinquegrana, BayCoast Bank
Mike Schein, closing attorney