You can cashflow too much
Investment Info:
Single-family residence buy & hold investment in New Braunfels.
Purchase price: $189,000
Cash invested: $47,250
This was my second rental investment.
What made you interested in investing in this type of deal?
I was looking to add to our portfolio and this one was slightly priced below market value and was in a good rental market.
How did you find this deal and how did you negotiate it?
Found it on the MLS I was able to negotiate a little bit lower of a sales price because I was willing to close quickly. I was focused more on cash flow than overall price.
How did you finance this deal?
Conv 30yr fixed with 25% Down.
How did you add value to the deal?
This was !00% turn key. I was able to lease it 2 weeks after closing.
What was the outcome?
I was able to cashflow about $150 more than I had originally expected.
Lessons learned? Challenges?
I learned that a larger monthly cashflow sounds nice, but it ties up more capital if you do 25% down instead of 20%. The extra cash flow is nice until tax season. Now I try to make sure my cash flow is closer to the yearly depreciation amount to minimize my tax burden and allows me to acquire more rental properties.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Nick Drake was my lender. He is an amazing loan officer if you are looking for someone to finance a hold strategy
Nice. Congratulations on cash flowing more than you had planned. That's always a nice surprise :) @Chad Brady
Thanks, now I am thinking more big picture and trying to increase my cash on cash return by minimizing my initial investment.
