New Construction Single Family Rental

[Kelly Reynolds]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $225,900
Cash invested: $64,000

My husband and I purchased a new construction, single family home for long term rental purposes. The property is 3 bed, 2 bath, 1548 SF. We entered into the purchase contract in November 2020 and were supposed to close on the property in March 2021 but the construction was delayed by 3 months due to various impacts related to Covid. We finally closed on the property on June 28, 2021 and by the time we closed, rents had increased from $1650 to $1725.

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

We wanted a nicer property to minimize maintenance headaches and to attract a higher class of tenant and therefore new construction was recommended to us.

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

We were connected with the builder through Norada Real Estate. We paid the asking price.

How did you finance this deal?

We obtained conventional financing with 25% down.

How did you add value to the deal?

We did not make any renovations or changes to the property.

Lessons learned? Challenges?

We wish we had started investing in real estate sooner. Our biggest lesson was that we didn't start investing as early as we would have liked. The biggest challenge was trying to keep the financing on track with all of the construction delays. We had locked our loan too early and got stuck in the trap of having to choose whether to extend for 30 days or drop the rate lock and wait the 30-day waiting period. We learned not to lock your rate too early.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We work with Aaron Chapman's team at Security National Mortgage Company, who I would definitely recommend for your investment financing needs.