First rental property

[Michael Jennings]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $40,000
Cash invested: $25,000

2 bedroom 1 bath originally, brand new furnace, water heater, and roof already on home and installed within the last year before I purchased.

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

I knew I could get some good equity and also great cash flow out of this house.

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

I knew the property owner who is also a rental property investor. He had a rehab going that was to big for them to finish in a timely fashion so I knew I could get a better deal.

How did you finance this deal?

Through a conventional 30 year loan with 25% down

How did you add value to the deal?

All new flooring throughout, new cabinets/countertops, all new plumbing and plumbing fixtures, added a bedroom on out of the existing sun room, new paint on interior and exterior, all new door hardware and new cased in openings where I took out doors that were not needed.

What was the outcome?

A beautiful house that I can rent for $975 and I doubled the price of the home.

Lessons learned? Challenges?

Try not to rush so fast on the fix up
Plan better on cost of renovation. I was about 3 grand off but there was a lot of added cost on behind the wall items I ran into that I was not expecting.

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

Just the lender of the bank.