Second Investment Property in Melbourne, FL (2017)

[Matt Leber]

Investment Info:

Single-family residence buy & hold investment in Melbourne.

Purchase price: $145,000
Cash invested: $35,000

This is our second buy and hold rental property. I knew it was a deal when I first saw it. It was listed as a 3/2 ~1600 sq feet. Upon walking the property, we noticed there were actually 4 bedrooms. This resulted in an immediate couple extra hundred dollars we could charge in rent, because 4/2s are rare in the neighborhood. Not to mention its in a quiet neighborhood in a great, growing part of West Melbourne!

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

I knew it was close to a 1% rent to purchase price when I first saw it listed. The surprise 4th bedroom further increased our cash flow projections. This was our second deal at the age of 24.

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

MLS. We had to see it and make an offer the first day because it was a hot property. We went in with our highest and best right away because we knew competition would be stiff.

How did you finance this deal?

Conventional 20% down

How did you add value to the deal?

Upon closing, we refinished the kitchen cabinets, added new appliances, new vanities, and fresh paint on the interior and exterior. We also built a fence in the backyard and learned about and contracted out an electric panel switch and garage door repair. We learned a lot in our second deal.

What was the outcome?

Found a great tenant before our first mortgage payment was due and secured first, last and security. We have since renewed him to a second year lease and make a great cash flow on this one.

Lessons learned? Challenges?

We thought the roof might have been old based on the age of the house. I learned how to contact the city and found out it was only 12 years old! No new roof needed. This was also the first property we had to market and screen tenants for, since our first investment came with tenants in place. We learned a lot about advertising and screening.