Tempe Arizona / Value Add + LTR Strategy

[Vicente Terán]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $550,000
Cash invested: $150,000

Single family home, permitted 600sf addition to make six beds and three bathrooms. Currently holding as a long term rental

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

Loved the high rents that can be achieved in the area. By doing permitted work I was able to force appreciation by adding square footage while increasing monthly rent by 40%

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

Encountered the listing on the MLS. Ended up paying 15k over asking.

How did you finance this deal?

Conventional loan, investment type

How did you add value to the deal?

Permitted 600sf garage enclosure with the City of Tempe. Added two large bedrooms and full third bathroom.

What was the outcome?

Renting the property for $5k / month and cash flowing over $2500 / month. The lease includes co-signers to reduce my risk and liability. Long term student rental.

Lessons learned? Challenges?

City permitting and standards.