Second Investment Property

[David Caradonna]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $239,900
Cash invested: $8,000

This was my second home purchased turned investment property. It cash flows over $1,500 a month and has appreciated almost $200,000 in three years in this booming market.

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

I have 1 other investment property which I purchased in 2018. After the success of that one, I knew it was smart to continue building my portfolio.

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

It was a primary residence turned investment property after three years.

How did you finance this deal?

Since it was a primary residence, we put 5% down originally, seller covered all closing costs. After credits given back by our lender, we were around $8,000 all in. We did some small updates over time but nothing significant.

What was the outcome?

My wife and I were going to sell it and use the proceeds for a down payment on our new primary residence. We realized rental rates in the Tampa market have exploded due to a lack of supply. Since it was a primary residence our interest rate was low, it is in a booming neighborhood, and we cash flow positive almost $1500 a month along with over $200,000 in equity.

Lessons learned? Challenges?

We were the ones that bought the "nicer" house in a bad neighborhood which came with some challenges. Car break ins, safety issues, etc. Since we were living in the home, we were able to handle it. The neighborhood has since gotten better however it took years to get there and if we purchased this as an investment property during that time with tenants, it would have been a nightmare. From now we would just do flips in these situations.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate Agent - James McNally at Century 21