Updated over 6 years ago on . Most recent reply
Buying out of state property
Investment Info:
Single-family residence buy & hold investment in Indianapolis.
Purchase price: $135,000
Cash invested: $15,000
3 Bedroom, 2 bath, 2 car garage, partial basement, 1/2 acre lot.
What made you interested in investing in this type of deal?
Good property for BRRRR strategy
How did you find this deal and how did you negotiate it?
Real estate agent and aprox. 2 months of looking.
How did you finance this deal?
Leverage off of equity on another rental. After I put a tenant under a lease I will get a 30 year fixed rated mortgage for a 135000. I will only have 15000 (rehab money) in the deal. The house will appraise for approximately 180000.
How did you add value to the deal?
The house needed flooring, interior paint, some exterior paint. Needed minor landscaping and that's about it.
What was the outcome?
I should do fine if I keep the house 5 to 10 years. I have 30,000 equity immediately, but unfortunately I will have little cash flow. My buy down on the loan will be starting around 155 a month. Property has appreciated 5% per year for the last four years. After property management, Principal and Interest, taxes and insurance I will have 110 but that does not cover maintenance or vacancy.
Lessons learned? Challenges?
I need to look at the numbers closer in the future. I don't think I got hurt on this deal but I'm not really making any money.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I did work with a real estate agent. I live in Colorado and the house I purchased was in Indiana. He is a hard worker and a great salesman and I would probably recommend him for the Indianapolis area. His name is Scott Veerkamp.