My first company rental property

[Lance Dacy]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $350,000
Cash invested: $80,000

North Euless but in Grapevine-Colleyville ISD. The backyard is a large corner lot perfect for a pool. The home is in walking distance to McCormick Park that connects to Eden Park. The living room has beautiful wood floors with high vaulted ceilings and an updated fireplace. The kitchen features a large eat in breakfast area with views of the trees in the backyard. The large Master Bedroom is downstairs and big enough for a sitting area.

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

School district, local/knowledgable about area, targeting single family Mom/Dads that want to stay in expensive ISD, but have landed on troubled times (Divorce, financial distress, etc...) as well as elderly people looking to cash out of their home and rent in a nice area.

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

Sadly, found it on MLS, so in the end might not be the best deal, but so far is working out for me. I have a calculator that I use to help me determine if its a good deal, so after looking at 10-20 homes, we landed on this one.

How did you finance this deal?

Conventional Mortgage (didn't know all my options at the time, but used my own money down and hope to grow this one long-term).

How did you add value to the deal?

We spent about $8,000 on painting exterior, landscaping, painting inside, cleaning, and just general replacement of a/c vents, plugs, switches to make it look nice. We also did maintenance on the HVAC and Sprinkler to get it move-in ready.

What was the outcome?

Upon placing it on the market, we showed the house to 3 different potentials, had 5 people interested, and found someone to lease before the first payment was even due. The person signed a 2 year lease, we came down on our rental price a bit for the longer-term lease (likely a mistake), but we are still cash flowing positive as of now and hope to keep increasing rent to cover some of the items I was not thinking about (learning from reading books).

Lessons learned? Challenges?

We should have accounted for a lot more money in the monthly rental calculation. While we are on par with the market in rent terms, we probably will have issues if the house starts having problems, but we did find a great home, had a great inspection, and hope to use this one to learn property management in more detail.

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

Yes, Renee Ongaro in DFW at Ebby was great, I used SOFI as the mortgage, but will be going with FranceLending.com on the others and possibly explore private lending as well.