2nd New Construction for Rent

[Jonathan Small]

Investment Info:

Single-family residence buy & hold investment in Jefferson.

Purchase price: $249,000
Cash invested: $7,000

2nd New Construction Deal

Property details: 4 bedroom 2.5 bathroom single family house. New construction in a new subdivision. Great school district. Technology and logistic companies are economic drivers. I choose to self mange this property since it is at a higher rent rate and new construction.

Deal finding: Upside opportunity to increase rent over time. This is a high appreciation area. This is currently the only house that is less than 250k. I am expecting to increase rent 10% at renewal. Low rental inventory is leading to higher rent increases. This is a long term buy and hold investment. On a scale of 1-10 with 10 being a grand slam I consider this deal a 8.

Number analysis: I will have about 19% equity before the down payment. Taxes and insurance are about 6% of sales price. Area has about a 2.4% vacancy. I was able to work with my local banker to get the following terms: 3.5% rate, 5% down, 30 yr amortization.