2 Bedroom 2yr Rental Into Flip
Investment Info:
Single-family residence buy & hold investment in Valdosta.
Purchase price: $75,000
Cash invested: $10,000
Sale price: $120,000
This is a 2 bedroom 1 bathroom single family detached house is South Georgia. It was purchased from MLS as a long term buy and hold rental. It is located in an area that attracts college students/employees, working class families, and military families.
How did you finance this deal?
I financed this property using down payment funds from 403B and a local commercial bank. 15% down from personal funds. 85% down from community commercial bank. 3yr balloon, 20yr amortization, 7% interest rate.
How did you add value to the deal?
I renovated the kitchen with paint and cabinets. I renovated the bathrooms with tile, paint, and new cabinets.
What was the outcome?
The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid. The property was held for 25 months and sold. The profit was used to buy a higher quality SFH in the same area.
Lessons learned? Challenges?
I learned a creative way to finance properties using my 403B. One of my challenges was selling a property with only 2 bedrooms and 1 bathroom. Most families want at least 3 bedrooms and 2 bathrooms.
