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.
Thanks for this post Roger! And good luck with the investment. I hope to see some positive updates about it in the months to come!
I’m just getting started on my OOS investing journey and I love to see real life examples laid out like this.
-Dan
Will do. I feel forced to do deals out of state. The front range in Colorado is very expensive and finding better deals elsewhere seems like a no brainer. The deal is ok but I will sharpen my pencil on the next one. Hopefully before the end of 2019, is my goal.
Good work Roger! Was this your first OOS deal? Taking the leap with BRRRR right out of the gate!
Thank you, and yes my first OOS deal.
