First out of state rental property

[John Rankin]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $50,000
Cash invested: $90,000

My first ever out of state investment was a single family rental property in Indianapolis purchased in August 2020 during the COVID pandemic.

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

Long term cash flow and recycling of initial capital utilizing the BRRRR strategy

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

After getting out-bid on numerous mls deals this one came through via a wholesaler. No negotiation on price and was risky buying as-is without any contingencies but I knew the area and market well enough to feel comfortable in the deal.

How did you finance this deal?

Cash. Since I used all of my own cash I didn't have any financing costs and actually delayed the refi process until about 9 months after purchase. This helped with the appraisal as the overall growth in the market helped push the appraised value of the home to $160,000.

How did you add value to the deal?

This property needed a complete cosmetic upgrade. Rehab was originally budgeted for $30k but turned out to be closer to $40k.

What was the outcome?

Home run BRRRR with infinite returns that cash flows $200 per month. I actually could have cashed-out more than I put in but decided to only pull out my initial capital to give me some extra monthly cash flow.

Lessons learned? Challenges?

Was very hesitant during the middle of the pandemic as the future was so unpredictable but had analyzed enough properties to know what a good deal looked like. Investing remotely is always a challenge but having a good boots on the ground team is key! While the timing of the market helped, the single most important thing that I did was take ACTION rather than mull over what could go wrong.