Single Family Residence in a very Linear Market

[Tim Houzenga]

Investment Info:

Single-family residence buy & hold investment in Morrison.

Purchase price: $70,000
Cash invested: $15,000

3BR/1.1 Bath. Unfinished basement. Could be finished. Egress windows in basement. Bonus room could be converted to a master suite.

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

Stable growth in income and net worth. Tax write offs.

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

Was a FSBO. Saw the sign while dropping my kid off at babysitters house.

How did you finance this deal?

Traditional. 20% down. 30 year mortgage.

How did you add value to the deal?

Sweat equity. Painted kitchen and bedrooms. New roof in 3-5 years. Converting bonus room to a bedroom so it can be listed as a 4BR house instead of 3BR

What was the outcome?

Cash flowing around $100/month. Cash on cash return around 8.5%

Lessons learned? Challenges?

Negotiating is key. I needed the house at $65K. Sellers would not budge. Instead they agreed to install a new water heater and make other repairs that lowered my expenses in the back end.

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

No.