Fourth Buy and Hold Rental

[Taylor Umphlett]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $32,000
Cash invested: $33,000

Brick 3 bed 2 bath. Bought as a 2/1. I installed new HVAC, flooring, light fixtures. The laundry room was falling down from termites. No home inspection, bought with a handshake. Converted the dining room to a bedroom. Updated the bathroom and kitchen, all new plumbing. This house was the largest project I had done to a rental so far.

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

This house is a small brick house that was priced cheap for the market.

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

I was riding around looking for vacant or run down property. Loooked up the owner who lives in the same neighborhood and me. Went to his house and talked to him. Met at the property and bought it with a handshake, no cantract. A week later I closed on the property.

How did you finance this deal?

I bought this house all cash. I refinanced all four houses the next year and pulled all the cash I had spent on all of them back out. I just wanted what I had spent back out, I still have a ton of equity in the properties.

How did you add value to the deal?

I completely redid the laundry room and renovated the entire house. The biggest contributor for any house, in my opinion, is adding central HVAC.

What was the outcome?

I rented the house for $200 more a month than what my advisor said that I could. The previous owner was getting $450, I get $700. I am still under the market rent by $100-$150.

Lessons learned? Challenges?

I learned that I should hire out the work. It will cost more but it will take significantly less time that if I do it myself.