Monthly rental and city approved STR. Off market purchase

[Jennifer Casey Kime]

Investment Info:

Single-family residence buy & hold investment in Springfield.

Purchase price: $175,000
Cash invested: $15,000

Contributors:
Nick Kime

After updating we rented on a monthly basis. We paused renting for about 3 month to complete the Springfield Short Term Rental approval process. 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. This house was more expensive than the previous two but it needed very little work. We were able to get this one up and running in about a month. Ordering and receiving the furniture took the longest.

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

We wanted to follow the same template as the previous two properties. This property is a little farther away from hospitals but it's closer to our primary residence. That made it more convenient to manage.

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

This was our first off market purchase. When our neighbor was ready to sell her house she approached us first. We had mentioned previously that we might be interested if she ever wanted to sell. Our real estate agent did all of the paperwork for a flat fee. We wanted to be as fair as possible so we paid for an appraisal before making the offer. We then reduce that by 6% plus the value of some work that was needed.

How did you finance this deal?

This was through traditional financing. We had saved up the 20% downpayment and went through the conforming loan process.

How did you add value to the deal?

This one didn't need much work so we didn't really add much to the deal.

What was the outcome?

The house came out really nice and is now cashflowing.

Lessons learned? Challenges?

This house taught us the benefit of off market deals. It also encouraged us to talk to more friends and family about wanting to buy real estate.