SFR Buy and Hold, Seller credit to buy down rate

[Gabriel Perez]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $169,000
Cash invested: $55,000

Property needed cosmetic repair. Approached the seller asking they pay all closing costs, received enough credits to buy down the interest rate back into the 5-range (current rates were in the 7-range). That brought the monthly mortgage to within range of over $200/month cash flow. Property was more disgusting than we anticipated and we had to put extra money into deeper cleaning. Overall it did take a bit more cash than we wanted, but we are very happy with the result and may consider selling in a few years once rates cooperate with higher purchase prices.

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

I am a fan of the cosmetic repair buy and hold

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

Found it on Zillow searches and my agent on the ground got me into a virtual tour quickly

How did you finance this deal?

Used a HELOC on a primary, and was sure that even with that additional debt-service, there was + cash flow.

How did you add value to the deal?

Deep cleaning, new paint, lots of cosmetic repairs.

What was the outcome?

Being held, and renter is paying our PM enough to bring cash flow.

Lessons learned? Challenges?

Might possibly make a term of negotiations that a thorough deep-cleaning takes place.

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

Worked with the go-to realtor, go-to property manager, go-to lender, and used the GC that the property manager recommended.