Purchased with cash, intended on taking a mortgage after to use for another purchase

[Stephen Reyes]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $160,000

Purchased with cash to close fast and get for low price. Intended on taking a mortgage after to use for another purchase. However, I found out that banks did not want to lend me money on a property that I had purchased less than 120 days ago. Even though I was only looking to take about %60 of the value. So I had to wait 6 months. By that time the interest rates had increased and I no longer wanted to take a loan.

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

I am buying and holding rentals to provide retirement savings/income.

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

Realtor brought it to me. It had fallen out of another deal due to the buyer's financing. The seller was on a tight timeline so I offered a low, all-cash price to close in 7 days.

How did you finance this deal?

Cash

How did you add value to the deal?

Replaced rear deck, some flooring repairs, small electrical repairs.

What was the outcome?

Outcome has been great, with the exception of the amount of cash I have tied up. I uses the large metal building in the back as my workshop and rent the house separately.

Lessons learned? Challenges?

You cant get a mortgage directly after a cash purchase.