Wilmington DE Purchase | 2020

[Ronald Stephenson]

Investment Info:

Townhouse buy & hold investment in Wilmington.

Purchase price: $205,000
Cash invested: $13,800

BLUF: Purchased primary residence had a roommate and now a fully functional rental.

Sale Price: $205,000
Down Payment: $0
Closing Costs: $8,000
Mortgage: $209,000
Monthly Payments: $1,240

One year residence with roommate -> saved $5,900

Property Management Team
* Repairs: $5,800 (Interior Paint, Carpet Replacement, Minor Cosmetics)
* Tenant: $1,800
* Cost: $198

Total Cash Investment: $13,800
CashFlow: $352 / m

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

I was working full-time in Wilmington, DE, and my lease ended that year. I needed a place to stay and was tired of having a landlord that would lack communication or allow repairs to go unfixed for months. Thus I knew I had the VA loan in my back pocket and chose to purchase a property rather than be a tenant for another year.

How did you finance this deal?

Utilizing the Veterans Affairs (VA) home loan allowed me to place a $0 down payment and add the VA Funding Fee on top of the mortgage.

What was the outcome?

I purchased the property and had a roommate for a year and a half, transitioned from a primary residence to a rental property with the help of a property management team.

Lessons learned? Challenges?

The primary lesson I learned was that even if you decide this is the property you will live at for five years, you still run the numbers; you never know you may want to sell or turn it into a rental.