Investing for Future cashflow

[Christopher David Harris]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $70,000

Bought as a Primary residence to get us out of our last property. We anticipate refinancing our 5.941% interest rate when rates drop to lower the payment to make this a viable cash flowing rental property.

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

Our area is exploding, and it's close to our other rental property. Given that our area is still growing and expanding I anticipate that our prices will continue to rise as we're still lagging behind a lot of the rest of Utah, so we're investing for a few years out.

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

MLS, Listed at $275,000 offer accepted at $250,000

How did you finance this deal?

20% down Conventional, used previous HELOC for 50% of down payment.

How did you add value to the deal?

Property smelled of heavy smoking. We removed the popcorn ceiling, replaced Cabinets, flooring, baseboards, repainted, replace light fixtures, replace all the outlets, etc.

What was the outcome?

We got an appraisal for $305,000 gaining $55,000 from the purchase price. Opened another HELOC on the unit and got the cash out at a cheaper rate and paid down the previous HELOC making the Cashflow from those units even stronger.

Lessons learned? Challenges?

We should have negotiated more after the initial offer to get a slightly better price since the smoke damage was more extensive than we initially thought.

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

We recommend our mortgage broker Todd Memmott with Legacy Mortgage to everyone, he's been great for us.