3rd LTR Property; 1st Deal via Partnership!

[Zachary Rymarcsuk]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $92,000
Cash invested: $36,000

3/3, built in 1983, in one half of a duplex, just 1 minute from an entrance to Fort Bragg.
Purchased with a partner providing the down payment and myself providing renovation costs and labor, with plans to refinance within 1-2 years of purchase to successfully complete this BRRRR deal.
Roof, fence, and HVAC all less than 5 years old at time of purchase.
Largest renovations included new deck, LVP flooring, granite countertops, and finishing the master closet.

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

Property is a 3/3 where each bedroom has its' own bathroom and it is so close to Fort Bragg that it had great potential to rent by the room for maximized profit.

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

Found property listed on Zillow as FSBO and contacted seller within 1 hour of property going live. I offered the seller the exact asking price, but the seller increased it by $10k due to all of the interest garnered. I reran numbers and, seeing that this still projected to be a good deal, offered the increased asking price, but with the seller paying $3k of closing costs, which was accepted.

How did you finance this deal?

Conventional financing with 20% down.
Partner paid for down payment and closing costs.
I paid for renovations.

How did you add value to the deal?

Biggest items were tearing out deck and installing new one, replacing carpet with LVP, installing granite countertops and new sink/faucet in kitchen, and finishing master closet. Many other smaller items were completed as well, which took much longer than originally anticipated.

What was the outcome?

Property got listed about 1 month behind schedule and we had to drop rent $100/month to garner much interest. Within 1 week of dropping rent, we had a signed lease. The good news is that the final monthly rent amount is actually $150 above what we originally projected it would be.

Lessons learned? Challenges?

Even some small items are quite a bit more time consuming to complete than you'd think, especially when you are training yourself on them as you go.