Follow the market and provide value

[Emily And Eric Erickson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $50,000

3 bedroom, 2 bath single level in normal lunch pail Joe neighborhood. Rented it to a young family who are excited to be out of the apartment scene.

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

This is all about the cash flow and finding nice properties that everyone wants. This one fits that bill.

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

Professional rehabber got the initial deal, got the cats out, put in new HVAC and new floors and paint and put it on the market. Rehabber overpriced it and it sat on the MLS for more than 30 days. Cash flow numbers still made sense, bought it for under list price (which everyone says you can't do) and then got another $10,000 off when the appraisal came in low.

How did you finance this deal?

30 year, conventional loan with 20% down

How did you add value to the deal?

Offered it as a lease option rental

What was the outcome?

Filled in under a month, tenants have made every payment and are learning how to budget better.

Lessons learned? Challenges?

Appraisals are always interesting...