Bad property, Bad renters = Still NET POSITIVE

[Stacey Nelson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $155,000

4 BR - 2 bath

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

I had just turned my starter home into a rental the previous year and this was a similar house in the same area.

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

I helped a friend "flip" the house and as we were remodeling the place I told him the price I would need to be able to make the numbers work. We kept the realtor fees out of it so we both got a decent deal.

How did you finance this deal?

Somehow I got a $0 down on an investment property.

How did you add value to the deal?

I worked with the initial investor putting man-hours into remodeling the home. We also saved realtor fees by keeping it between the two of us and he had his realtor license.

What was the outcome?

The deal went great, but the property had issues. We had roots in the sewer lines, and flooding from city street drainage, and poor renters. With all that went wrong, the equity we gained and tax savings far outweighed all of those losses over the 15 years.

Lessons learned? Challenges?

Find properties that are desirable and people want to fight for instead of low-end properties.

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

The investor I worked with is Craig Toquam. I'm not sure if he is part of this community or not. I will encourage him to become part though.