Buy and Hold Rental Property

[Luke Cullinane]

Investment Info:

Single-family residence buy & hold investment.

1 Bedroom cabin on 9 acres on Paris Mountain

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

This was the first home I was able to buy. I lived here for a year and a half and then moved to another property and began renting it about 10 years ago.

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

I found the property online and purchased through a local realtor.

How did you finance this deal?

Traditional Mortgage

How did you add value to the deal?

I built a new deck, about 1000 square feet. Fresh paint interior and exterior. New appliances. Remodeled Kitchen and bathrooms and cleaned up storage spaces, added shelving and interior trim where I could.

What was the outcome?

This has been a solid rental with minimal vacancy. The rent covers my mortgage and creates modest cash flow. I also was able to use the property to get a HELOC loan and purchase another rental property nearby.

Lessons learned? Challenges?

Screening Tenants. I’ve had a couple learning experiences. I now look for high credit scores and responsible tenants.
Capital Expense. I had to replace the old cast iron sewer line in the basement. That was really labor intensive work that I was able to do myself. The sewer was backing up and I paid way too much money trying to get others to clear the blockage. Ultimately, I had to break up the basement slab and run new PVC sewer line in the basement, then pour new concrete.

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

Initially I worked with local realtor but I found they didn’t properly screen the applicants and didn’t devote much time or energy. I now use online services to handle applicants and only interview applicants that I think will be a good fit. I require would be renters to go through the online application process which requires them to pay a small fee. This helps weed out tire kickers.