First investment property

[Stefan Folkert]

Investment Info:

Single-family residence buy & hold investment in Miami.

Purchase price: $168,000
Cash invested: $88,000

Contributors:
Alwin Jongkind

New build, detached 2 bed 1 bath. Delivered in August 2019.
Solar water heater and solar electric panels on the roof (inverter type, no batteries) with feed back into the grid.

Update, after 3 years we refinanced in 2023 and added a pool.

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

A place for my parents to spend retirement.
Home sick and surgery, they have only made two visits (September 2019 for a month and winter 2022/2023 for 6 months) and it has been long-term rented since.
A 3 year tenant from 2019 and now a 1 year tenant starting march 2023.

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

Online, bought unseen.
Managed to take over a new construction that had already started, the original buyer couldn't organize financing.
No discount, just less holding costs during the build.

How did you finance this deal?

Parents helped with downpayment, and mortgage through a local bank

How did you add value to the deal?

We improved by adding AC, do the garden, build an outside shower and a pool and adding privacy fencing.
The project for the small neighbourhood is also finished now, no more building sites in the neighbourhood.

What was the outcome?

Original purchase price 168.000, add upgrades total 198.000. (Pool and outdoor shower in 2023, AC and garden in 2019)
About 17.000 in furniture added.

Most recent (Nov. 2022) appraisal was for 225.000 (before adding the pool in Jan 2023. The prediction is, it will add another 30.000 to the appraisal.)

Lessons learned? Challenges?

I should have bought a 3 bedroom when available, I should have bought a second home in the same new build neighbourhood when I had the chance.
Covid prevented that and I accepted it, not looking to be creative or take a slightly higher risk. The equity has been growing fast in Bonaire and I missed a chance there.

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

Not in the USA