Updated over 5 years ago on . Most recent reply
My seventh rental property
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $128,300
Cash invested: $55,000
Simple 1250 sqft. single family 2 bed, 1 bath ranch built in the 1980s in a C-class neighborhood.
What made you interested in investing in this type of deal?
Being a simple brick ranch it appeared to have low long-term capital expenditures. The roof is only a few years old and the HVAC is only a year old. I also felt confident that I could covert a living space to an additional bedroom. I felt like I could apply many of the strategies I learned about from BP to this rental.
How did you find this deal and how did you negotiate it?
I found this deal on the MLS. It was listed for $125,000, but I offered $130,000, sight unseen, hours after it came on the market. I gave the seller's only a few hours to accept my offer. I knew I had to be aggressive and move quickly in a hot market.
How did you finance this deal?
30 yr fixed conventional loan.
How did you add value to the deal?
The biggest value add was converting a second living space to a third bedroom.
What was the outcome?
During the 4 months of rehab, market rents have increased, and the numbers still work well for me. At the moment, the supply for rental housing in the area is almost non-existent. In less than 12 hours of having the listing on the market (most of them overnight), I have had 11 inquiries!
Lessons learned? Challenges?
I anticipated $12,000 in rehab, but it ended up costing twice that amount because I want everything to be functional and have a luxury level rental home for my clients.
Most Popular Reply
Congrats even with the additional cost of reno, it seems like you've made a good deal.
Look into "Hofstadter's Law"... This seems to be true of just about everything!