Updated over 4 years ago on . Most recent reply
Buy and Hold Investment
Investment Info:
Townhouse buy & hold investment in Baltimore.
Purchase price: $108,700
Cash invested: $71,216
First buy and hold property.
What made you interested in investing in this type of deal?
I analyzed the deal on the bigger pockets rental property calculator and it met my $500/month pure cashflow requirement.
How did you find this deal and how did you negotiate it?
The property was listed on the MLS for $115K as a "hot home". My agent and I offered $110K and seller countered at $112,500. However after the inspection we negotiated some fixes and they decided to give us credit instead so final purchase price was $108,700.
How did you finance this deal?
Conventional financing with a 30-year fixed 4% interest rate and a 20% down payment which came from retirement savings.
How did you add value to the deal?
Updated kitchen and bathroom along with light fixtures. Added fresh paint and did landscaping.
What was the outcome?
Renovation is now complete and I am getting ready to list the property for rent. Also, I will be pulling a HELOC against the equity to purchase next property.
Lessons learned? Challenges?
Be bullish with negotiating up front and "never split the difference" but at the same time finding a common ground is important.
Provide contractor with a detailed SOW, DO NOT JUST SAY IT, WRITE IT!
Stick to your numbers and do not deviate.
