Monthly rental and city approved STR

[Jennifer Casey Kime]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $145,000
Cash invested: $50,000

Contributors:
Nick Kime

After remodeling we rented on a monthly basis. We paused renting for about 3 month to complete the Springfield Short Term Rental approval process. That definitely hurt cashflow in the short term. We plan to continue focusing on monthly rentals but now have the option to rental out short term. I expect the cashflow to be level out closer to $800.

When we took control of the house we had to pull out all the nasty carpet, lay flooring, paint, update electrical, etc. House looks pretty nice now.

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

This property is close to two hospitals in Springfield. That made it idea for travel nurse rental. The house needed a lot of update but no structural/major repairs. My husband and I were able to do most of the work.

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

This was our first deal so we didn't really negotiate. We found the property through an online search and contacted the selling agent directly. The broker had a buyers agent in the office also that did the purchase for us.

How did you finance this deal?

Husband and I took out loans against our 401(k)s.

How did you add value to the deal?

We did a lot of updating. We pulled out old nasty carpet and padding. We installed new laminate flooring and painted everything. Had to install and second sump pump under the house. Doors had to be refitted a little. Electrical outlets and switches were all replaced. A dual-head mini-split was installed for the upstairs bedrooms.

What was the outcome?

The house came out really nice. It was quickly rented to travel nurses.

Lessons learned? Challenges?

This was our first investment property purchase. So my husband and I had to learn all of steps starting with the pre-approval letter. Even the process of making an offer was confusing. We were afraid to make an offer before the bank had approved the loan. We didn't realize there was a finance contingency in the offer contract. Once our agent saw that we were confused she did a great job explaining the process. We were definitely more prepared for our second purchase.