First investment house

[Fouad Droubi]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $260,000
Cash invested: $60,000

I bought it as my a personal home, but because I work overseas, I figured I will rented and cover my monthly payment from the rent. I have never lived in it and got it rented a month after purchase. For the first five year same tenant occupied the property. Then moved out due to increase of rent to match market price. Now it is renting for 2000 a month covering my monthly payment and with a cash flow of 600$.

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

It was bought as a family house. For myself and family to live in.

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

Through my real estate agent. House came on the market, got it inspected all went well, made the offer and within three days of house on the market I closed on the house. Keep in mind that I have made several offer prior on different properties but all offers were rejected due to higher offers from others. So I learned through the process how to make offers.

How did you finance this deal?

Mortgage -credit union.

How did you add value to the deal?

Made the offer for asking price. Increased the deposit to show how serious. Obviously had my pre approval letter from the lender.

What was the outcome?

Deal went very smooth. However, small hiccups with lender but nothing too complicated.

Lessons learned? Challenges?

Originally the loan was supposed to be first time home buyer, but when I told the lender I worked overseas and not going to live in for now, they said since you live and work overseas this cannot be a first time homebuyer. Rather an investment property. Thus the terms of the loan are going to be different. 4.5% with an option of either 10 or 20% down payment. I choose the 20% and the lender went ahead.

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

Had a real estate agent and lender. A credit union was a lot easier to deal with compared to bigger banks.