My second of (hopefully) three investments this year

[Holly Brown]

Investment Info:

Other buy & hold investment.

Purchase price: $130,000
Cash invested: $26,000

Purchased this lot with plans to build a house with garage apartment. I sourced a credit union that on the land at 20% down and then pair that loan with a non-repayment construction loan until both loans could be combined into a standard DSCR style loan. Wish me luck on my first buy and build.

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

Aside from investing I am also a real estate agent and I want to understand the process of buying and building from the standpoint of the investor and share those learnings with my clients.

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

MLS. Negotiated for over a month and aligned my goals with the sellers to increase my chances that they would agree to the lower price. Negotiations don't have to be aggressive. Show the facts and build a case for your offer. LET IT SIT. If you don't get it, it wasn't meant to be and there are always other options in the future.

How did you finance this deal?

Credit Union

How did you add value to the deal?

ARV - holding costs - construction/permitting costs estimate a cash out refinance of between 130 - 150K> Plan is to BRRRR with two long term tenants netting approximately $650 per month cash flow with conservative rental numbers and assuming property tax increases to that ARV value. I could also sell, but Plan A is BRRRR.

What was the outcome?

Land appraisal came back at 235K and I purchased the land after negotiations at 130k. Instant equity win.

Lessons learned? Challenges?

More to come. This is my first of this type of investment. I look forward to learning and sharing with investors I help in the future.