Turnkey new construction rental in Kitsap County

[Alexander Foos]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $525,000
Cash invested: $137,000

Ease of entry, this was our first ever investment property. We bought a brand-new home at the recommendation of our broker. We are not currently netting a monthly profit, though the rental income is covering for mortgage+insurance+taxes+mgmt. If accounting for vacancy (5%) we are producing negative cash-flow by about $140.

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

In Western WA, home prices are extremely high. As first-time investors with no experience in rehab projects, we wanted to buy in an area where the rental income would cover the monthly expenses. Buying new construction in a community like Kitsap County where they are in the "path of progress" we believe our investment will grow to be more successful over the next few years via increasing rents and appreciation.

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

Our broker alerted us to this market (Kitsap County) when we live in King County where high turn-key home prices would not allow for positive cash flow.

How did you finance this deal?

30yr conventional loan

How did you add value to the deal?

N/A

What was the outcome?

Our tenant is paying our mortgage and expenses each/every month. So long as we do not have a vacancy, we are currently "breaking even" which is difficult to do in Western WA.

Lessons learned? Challenges?

In hindsight, we should have read the fine print on the HOA documents and CC&R closer so we could have learned that they prohibit mid-term (