Long Term Rental

[Michael T Lyons]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $186,000
Cash invested: $46,500

Home was built in 2018 as a long term Section 8 rental unit. No rehab investment necessary. Suffolk, VA has a 4% population growth for the past 3 years

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

Moving up from townhomes to single family residence. Next step is a multifamily property.

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

I found this deal through MLS listings. The numbers worked with a conventional loan, as a long term rental.

How did you finance this deal?

Financed the deal through a conventional loan at 25% down.

How did you add value to the deal?

The home was an average deal at the current loan rate. We initially were able to yield $408 per month ~ post purchase. After refinancing we were able to achieve $628 per month. As well, in 8 months the home value has increased by $25,113, averaging between 10-13% growth per annum.

What was the outcome?

The outcome is a positive experience, with a learning curve managing a Section 8 voucher program home.

Lessons learned? Challenges?

Post Covid-19 years, we learned that balancing our rental portfolio was important in order to withstand rental payment shortcomings during difficult times. With government backed rentals, we are assured not to have our payments disrupted by shutdowns, offsetting any loses during that time.