Just closed on a rental property and got paid $5K to buy it! (Negative Cashflow)

[Daniel Tanasa]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $138,000

Just closed on a rental property and actually got paid $5K to buy it!

I picked it up for $138K, with about $30K in needed renovations. My private money lender covered 100% of both the purchase and rehab costs—and even paid me $5K for my time. After refinancing, the property appraised at $245K.

BRRRR still works, but is hard to cashflow.

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

This is one of my target markets and type of assets.

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

A wholesaler I met at a meetup just a week prior brought me the deal. Negotiated it from 145 to 138k after I looked at it.

How did you finance this deal?

I picked it up for $138K, with about $30K in needed renovations. My private money lender covered 100% of both the purchase and rehab costs—and even paid me $5K for my time.

How did you add value to the deal?

Rehabbed it for around 30k, new kitchen countertops and some new cabinets, new appliances, new floor and paint, changed a door, changed the back yard fence, some siding on the outside and painted the outside.

What was the outcome?

I got paid 5k to buy it, BUT it’s currently rented for $1,800/month, which is a little less than my mortgage payment. After factoring in vacancies and maintenance, I’m likely losing around $200/month. One potential solution is switching to Section 8 in the future to improve cash flow.

Lessons learned? Challenges?

Buy cheaper or find better way to increase cashflow

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

I was the agent in the deal, and I will be happy to share my private money lender.

[Jaycee Greene]

Quote from @Daniel Tanasa:

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $138,000

Just closed on a rental property and actually got paid $5K to buy it!

I picked it up for $138K, with about $30K in needed renovations. My private money lender covered 100% of both the purchase and rehab costs—and even paid me $5K for my time. After refinancing, the property appraised at $245K.

BRRRR still works, but is hard to cashflow.

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

This is one of my target markets and type of assets.

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

A wholesaler I met at a meetup just a week prior brought me the deal. Negotiated it from 145 to 138k after I looked at it.

How did you finance this deal?

I picked it up for $138K, with about $30K in needed renovations. My private money lender covered 100% of both the purchase and rehab costs—and even paid me $5K for my time.

How did you add value to the deal?

Rehabbed it for around 30k, new kitchen countertops and some new cabinets, new appliances, new floor and paint, changed a door, changed the back yard fence, some siding on the outside and painted the outside.

What was the outcome?

I got paid 5k to buy it, BUT it’s currently rented for $1,800/month, which is a little less than my mortgage payment. After factoring in vacancies and maintenance, I’m likely losing around $200/month. One potential solution is switching to Section 8 in the future to improve cash flow.

Lessons learned? Challenges?

Buy cheaper or find better way to increase cashflow

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

I was the agent in the deal, and I will be happy to share my private money lender.

@Daniel Tanasa Great deal! Were you estimating the ARV at $245k before the lender approved your loan?