Second Investment Property

[Luca Mormina]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $69,900
Cash invested: $10,000

Second investment property under the books, currently rehabbing the property and hope to get it to market in the next couple months.

Outside of the opportunity to build my knowledge base on how things flow from an investment standpoint, I am given the opportunity to do something in advance before me clients. I want to be able to assist people from every standpoint within the home buying/living process. To be vertically integrated it takes discipline and practice with time under tension of actually doing what you are trying to sell.

Below you will see the pre-rehab property and hope to share the finished product soon!

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

Passive income was one of the biggest reasons for my second acquisition, I am trying to build a nest egg for my future self.

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

Found this deal through listing services and negotiation process was more lenient than I wanted it to be. Solid cap. rate on the property and was eager to see the deal through (never be an emotional buyer, I didn't follow my logic).

How did you add value to the deal?

I bought the property 82% ARV, which is against my normal logic on a value-add strategy. I anticipate I will kick myself at a later date, but we are all young and ambitious only once. Going forward, I am definitely going to stick to my investing criteria with future acquisitions, but unfortunately I was being brash in my rush to find my next opportunity.

What was the outcome?

Solid cap. rate that hurdles the high watermark currently in place with financing rates, going to cashflow the property in due time. I factor my acquisitions on Adjusted NOI base, out of fear of one off capital draws needed to continue typical rental operations. Even with that, I still am able to maintain a solid adjusted rate of 9.8% in year one.