How I used a cash out Refi to grow my portfolio

[Jayma Morgan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $215,000
Cash invested: $109,000

3 bed 2 bath 1143 sq ft SFH

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

The real estate market was going crazy, I had equity, and I used it to my advantage. I knew that the rents here would be going up too. I also had finally paid off some land we had purchased, and I wanted to have more cash flow coming in!

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

I had been using a realtor, but also looking on Zillow and Realtracs on my down time after work. I found the listing on Zillow, went to the Open house and saw it was "turnkey".

How did you finance this deal?

I convinced my parents to partner with me and we own it 50/50. They didn't want to have a mortgage.

How did you add value to the deal?

We didn't need to do much. We patched a few small holes in the main bedroom.

What was the outcome?

I have a high cash flow asset, that has appreciated quickly. When I am ready, I will be able to either buy out the other half, or use the equity to buy another property.

Lessons learned? Challenges?

It was difficult to acquire this property, we looked at and made offers on several before finally landing this deal. I took my handy man to inspect the property, we waived our right to have an inspection as it was a slab foundation, and the roof was fairly new. I know I will need to replace an AC in the next two or three years, but am setting aside reserves for that expense. If I hadn't had an all cash offer, it would not have been accepted. Sometimes it requires a partner to get a property!