Added 5th. longterm rental property to portfolio

[Damon Stratton]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $232,500
Cash invested: $278,000

2 Bedroom 2 bathroom single level townhouse in Mesa. Completely remodeled and updated. Approximately 1,150 sq. ft.

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

I live in Mesa, AZ. I have enjoyed purchasing 2-3 bedroom townhomes in the Mesa AZ area. Over the last 10 years I've fortunately been able to purchase 5 of them. My approach has always been to save and purchase them free and clear. In hindsight, I wish I would have leveraged at least a little bit when interest rates were 3%-4%, but now that they are over 6% the only way it makes sense to buy them is free and clear.

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

It was sent to me from a local wholesaler.

How did you finance this deal?

Cash

How did you add value to the deal?

I remodeled it.. (kept existing kitchen cabinets), but replaced all of the vanities in the bathrooms, and installed granite countertops, luxury plank vinyl through out, new light fixtures, added front landscaping, new toilets, shower, tub, new baseboards, light fixtures, garage door, garage door opener, two tone paint, etc...

What was the outcome?

The remodel took longer than I expected.. I was planning on a 6-7 week remodel, but ended up taking 12 weeks, largely due to poor workmanship by one of the contractors. It put it behind and caused a lot of extra work.

Lessons learned? Challenges?

Im happy with the townhome and how it turned out, but I believe I would have been better off holding onto my money at least for the next year or so to see what happens with the market. I think prices are softening, however I dont know how much they will soften.

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

I am a licensed realtor myself, and own a property management company here in the Phoenix area. I represented myself.