Value Add through Property Management, A Turn Key Rental Property in Sherman, Texas

[Jeffrey McKee]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $150,000
Cash invested: $40,000

Turn Key Rental Property in Sherman Texas. When first acquired rents were 750 and 600. Without any additional out-of-pocket capital expenses, we have raised rents to 1350 per side.

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

Sherman is a satellite city of the DFW. The purchase price was less than what can be found in DFW but rents are similar. Close to Austin College and Sherman is booming now that TI announced the billion-dollar chip manufacturing facility.

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

The property was listed on the MLS. We ran the numbers and it made sense so we found a partner and we went in halves and we self-represented and negotiated the transaction prior to being licensed.

How did you finance this deal?

Conventional Loan with 20% down.

How did you add value to the deal?

Implemented a system for property management that brings in higher-quality tenants and higher rents.

What was the outcome?

Still holding. We just collected a full year's rent in full for a tenant that was looking to move in. :)

Lessons learned? Challenges?

The bank considered this my first-time home buyer property even though it was a conventional loan with 20% down so when I went to do a house hack I had to come up with creative financing options for my next property. Ask me what we did :)

When a tenant is late by one day immediately start the eviction process. There is no exception.

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

I am now a licensed agent and would be honored to help you find your next or first investment property.