Single-Family Buy & Hold Investment in Danvers, Massachusetts

[Michael Marquis]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $525,000
Cash invested: $25,000

We purchased this single-family for the sole purpose of living in the unit for one year (conventional loan requirement) and then rent the property while we build equity/cash flow. Since I'm a licensed real estate agent in Massachusetts, I was able to broker the deal on the buyer's side and save close to $10,000 in RE commissions. Here's the description of the property.

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

Here's the breakdown of why it made so much sense for us to own versus rent:
Monthly Rental Expenses:
◼ Single-family Rent Expense: $3,700
◼ Electric $175
◼ Oil Heat $200
◼ Cable $100
Total Monthly Expense
Monthly Home Expenses: $4,175
◼ Principal & Interest: $2,950.29
◼ Mortgage Insurance: $112.22
◼ Taxes & Home Insurance: $512.84
◼ Electric Bill: $75
◼ Cable: $100
◼ Gas Bill: $35
◼ Water & Sewer $50
Total Monthly Expenses: $3,835.35

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

We found this deal on the MLS and since I am a licensed real estate agent, I received $10,000 in commissions to broker the deal. I am also a licensed loan officer and through my employer, I was able to secure a 1 point discount off the 30-year loan.

How did you finance this deal?

30-year conventional mortgage at 5.85%.

How did you add value to the deal?

We immediately repaved the driveway - turning a two-car parking into a six-car parking.
We also fenced in the entire yard.
We then replaced the water heater.

What was the outcome?

We are about to rent our single-family house on January 1st, 2024 for $3850-$3900 allowing us to cash flow approximately $300 per month.

Lessons learned? Challenges?

There are deals still out there. As long as the numbers work and you're willing to house-hack in order to take advantage of low-down payments, you can start building an investment portfolio.

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

I represented myself as the buyer's agent. I am also a property manager.