3Bed/2Bath SFH in Improving B-Class Neighborhood

[Ian Thomas]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $129,000
Cash invested: $29,800

3/2, 1200sqft SFH with detached garage and great backyard in a solid working class neighborhood on the upswing. Roof redone a few months prior to purchase, complete renovation done prior to sale. The water heater (at 8 years old) is the most likely to fail first.

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

I had recently left the military and moved back to Michigan with the intention of getting into real estate. A few months prior I had purchased my first home (where house-hack, renting out our extra bedroom to a roommate) and realized how simple the real estate purchasing process was. I wanted to keep going!

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

I had reached out directly to a listing agent about a different deal in the area. My offer on that deal was beat out, but the agent immediately told me about this property that had not yet even come onto the market. I put in an initial offer of 124k and it was countered at 129k. I accepted given the great condition of the property and its appliances.

How did you finance this deal?

Conventional w/20% down.

How did you add value to the deal?

I didn't! It was rent-ready from the start - really I just found a great deal.

What was the outcome?

Currently rented for 1250/mo (just under the 1% rule) and cashflowing about 200/mo after accounting for vacancy/lanwcare/emergency fund/etc. Given the condition of major appliances and structures, I am comfortable with this.

Lessons learned? Challenges?

Knock on wood - everything went pretty well. The only thing I would say is a future learning point would be utilizing hard money or private money as it will take a long time to scale with this method.

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

Tim Meduna from Treadstone Financial was absolutely amazing and closed the deal in about 2.5 weeks.