Our First Property is Now Official

[Account Closed]

Investment Info:

Single-family residence buy & hold investment.

We picked up a 2/1 SFH as a buy and hold investment in Huntsville, Alabama.

How did you find this deal and how did you negotiate it?

While interviewing Property Managers, one mentioned a deal she had just received from a wholesaler. We offered about 7% under asking and it was accepted. She forwarded the details and we made an offer the next day. It was accepted the same day with a 7 day escrow.

How did you finance this deal?

Private money loan.

How did you add value to the deal?

We will put approximately $7k into it and rent it out at a rate that exceeds the 1% rule (1.2%).

[Michael S.]

@Account Closed - sounds like you definitely did your due diligence on the property.  The property inspection is a must since you were not able to walk it in person.  

That said, I hope they were forthcoming about the zip code 35816 here.  It has some of the roughest areas of Huntsville, with C and D neighborhoods.  The good - you should definitely be able to get the 1% rule in 35816, or even 1.5% depending where the property is in 35816.  The marginal - appreciation will be limited in this zip.  The necessary - you must have a strong property manager for this zip, as the tenants could be challenging.  In the end, if the deal is right, and the location is decent, I'd still buy in this zip code for the cash flow.  

Please post an update in 6 to 12 months and let us know how it is going!  Good luck.