SFR Buy and Hold in Shively/Louisville KY

[Tyler Bodi]

Investment Info:

Single-family residence buy & hold investment in Louisville.

Purchase price: $50,000

Purchase price $50K, ARV $75K, and monthly rent $700. I was able to get traditional 30 year/25% down financing from a local bank. It needed little work to update and I will look to pull some equity out in a few years to buy more similar properties.

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

My current focus is to buy and hold SFR that have an ARV of 30% more than the purchase price and cashflow. I like this strategy so that I can eventually replace my income with cashflow and pursue a more desirable career.

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

There was a property I was interested in at the auction that ended up going back to the bank. I followed up and was trying to make a deal that did not end up working out however with persistence and assistance the bank told me about another property they were taking back the deed in lieu of foreclosure. The property fit the criteria I was looking for so I made an offer and closed the deal.

How did you finance this deal?

To finance this deal I used cash, a HELOC on another property, and a small loan from my IRA.

How did you add value to the deal?

I upgraded the bathroom and kitchen to attract the best tenants.

What was the outcome?

I will continue to rent the property until I get more equity to pull out for another purchase.

Lessons learned? Challenges?

This property turned out to be in a flood zone which is a bummer because it cuts into cashflow due to the required extra insurance however the numbers still worked and I am thinking about ideas to mitigate that cost (maybe a mini flood wall?).