All Forum Posts by: Kevin Hildebrandt

How has the area grown this year? Does the Bremerton area still have good opportunity?

Hey Joseph, 

I'm invested near downtown and it is becoming near impossible to meet the 1% rule with the rapid growth in the market. Opportunities for better cash flow may be better in the east valley like @David Weymouth mentioned. I still think there is great potential in the Garfield District near downtown, especially if you are able to do a little BRRRR.

To your original question, I too have had great luck in placing tenants and in the last 5 years have only been vacant for a month across both properties. 

Thanks @Brenden Mitchum

I agree. I got excited at the prospect and was trying to rush into it. We are going to go forward with a traditional 1 year lease and see how it goes and use that time to get a lawyer on our team and see if the tenant is interested in the option going forward on resigning. 

Everyone so far has given great insight and suggestions. 

I wanted to add my personal struggle with same dilemma. I am going through this right now for the first time long distance and had the same debate on how to handle PM versus self managed. We ultimately are going to continue been managing the properties through Cozy. From there, the listing gets  syndicated to a few other rental sites.

However, in Arizona at least, Zillow is still king for rentals. Zillow Rental manager is how I have scheduled all my tours and communicated with potential tenants. Their app works very well if you don't have a second number to give out to applicants. We have a family friend who is and agent on the ground who we are paying per tour, as reimbursement for gas and time mostly, but we will meet and Zoom all the applicants personally. 

I am curious how I should go about asking a qualified tenant if they are interested in a rent to own. What would be the first step and should I have the lawyer ready? As the owner, what should I look for when drafting up this deal?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $185,000
Cash invested: $6,000

First home my wife and I bought was using FHA loan. We lived in the home for about 6 months before finding out we had to move to San Francisco and have continued to rent it out. Home was built in 1920s and is in great historic neighborhood of Phoenix but will soon need some major repairs.

What made you interested in investing in this type of deal?

It was a good opportunity to get into a desired neighborhood that we knew would have great rental potential.

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

MLS

How did you finance this deal?

As this was my wife's first home purchase, we were able to secure an FHA loan. Despite paying the PMI we are still cash flowing while building equity. With the growth in equity and decreased principal we are now in the process of refinancing into a lower interest rate and conventional mortgage to remove this added expense.

How did you add value to the deal?

I provided down payment and property management for my now wife. While she was shopping around trying to buy in Phoenix, which we predicted would grow considerably, she needed the extra cash to get into the home.

What was the outcome?

From this first deal we made almost 4 years ago, we hoped it would grow well for us but didn't think of how it fit into our overall plan of investing. Now, seeing the great equity that have built we are thinking of utilizing as a part of a HELOC or similar strategy to purchase another home.

Lessons learned? Challenges?

Spend a LONG time on tenant selection. We have had the same tenants in the home for 4 years now and are just now having to look for new tenants. Though this month of vacancy has been painful, we remind ourselves that it is the first time in 4 years. The biggest challenge is coming right now because our tenants wanted to move on and become home owners themselves, in hindsight we would have seen if they were interested in a lease option for our place.