Updated over 5 years ago on . Most recent reply
Accidental landlord experience
Investment Info:
Single-family residence buy & hold investment in Willoughby.
Purchase price: $56,000
Cash invested: $10,000
Sale price: $88,000
Accidental landlord experience. Purchased as a primary residence, converted to rental shortly after. After performing many value adds and leasing to tenants for 7 years we finally decided to exit our ownership position and sell while market conditions were good. Huge learning experience on this first deal.
What made you interested in investing in this type of deal?
We leased this property out in order to avoid foreclosure.
How did you find this deal and how did you negotiate it?
This property was found on the MLS as a foreclosure.
How did you finance this deal?
Conventional loan, with approximately 7% interest. Eventually refinancing to approximately 4%
How did you add value to the deal?
Sweat equity and lots of it. The property was also stabilized with good tenants, we contested the tax assessment, and fine tuned our lease to ensure market rents and terms were regularly updated.
What was the outcome?
We achieved approximately $30k in forced appreciation. In addition to salvaging our credit reputation and avoiding foreclosure by leasing the property during a period of our own personal financial duress, we also achieved a positive monthly cash flow of several hundred dollars monthly.
Lessons learned? Challenges?
This property was a great introduction to investing in real estate. It taught me everything from construction techniques, to how to manage a SFR, dealing with tenants, how to contest a tax assessment, and much more. If I had to offer one solid take home lesson this property offered, it is this: No matter the type of deal even a primary residence, it's a great idea to have multiple exit strategies. I never analyzed this property as a rental before we purchased it. However, luck was on our side.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
We worked with Doree Adams as our buyers agent when we purchased this property. She was a great help and also offered plenty of insight when it was time to sell.
