SFH - Franklin Indiana

[Ryan Taylor]

Investment Info:

Single-family residence buy & hold investment in Franklin.

Purchase price: $125,000
Cash invested: $7,500

3 bed, 2.5 baths, 1300 sqft.

2-story SFH with fenced-in backyard. New HVAC. New hard floors downstairs and new carpet upstairs. Resurfaced countertops. Updated appliances, washer / dryer added. Fixed some cosmetic issues and replaced some water damaged wood on the front port.

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

I had my eye out for single family homes with rent / price ratio at the 1% rule (monthly rent = 1% of purchase price).

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

My realtor had this home ready to list and let me know it was coming onto the market. I was first bid with full asking price of $125,000. There were 3 or 4 other offers within a few hours of my bid. I offered to overlook any appraisal or inspection issues within $2000, which i think might've set me apart a bit.

How did you finance this deal?

25% down with 30yr bank note - 5.125% (rental property loan - not owner occupied)

How did you add value to the deal?

I did some minor plumbing work with the sinks, cleaned up and painted a vanity in the upstairs bathroom. Replaced some exterior porch lights. Resurfaced the countertops with Rustoleum Transformations (turned out pretty good!). Added refrigerator and new stove (converted from gas to electric stove). Repaired water damaged wooden trim along the porch roofline - added drip edge to prevent future water damage. Repaired wooden gate with new hinges and latch.

What was the outcome?

So far, the outcome's been great. This is my second deal but first with any sort of rehab required. Took me longer than I anticipated but I learned quite a bit. After 6 weeks of vacancy, I filled the property with good tenants at my asking price of $1300/mo. Plus, tenants are paying $25/mo for pet rent and $45/mo to rent a washer and dryer from me (washer/dryer i got for free -- Infinite ROI there).

Lessons learned? Challenges?

Learned just about everyones name a Lowe's since I was there so much haha... Honestly, I've become a lot more confident about home plumbing and electrical systems. I've acquired some wood working skills. I've acquired some general handyman knowledge and confidence.

It was nice to get to put my tenant screening plans to the test. I had created some criteria and a process that I got to put through it paces. Seemed to work out nicely!

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

I'd highly recommend both Doug Fredbeck (Keller Williams, Northside of Indianapolis) and Chris Cannon at Ruoff Home Mortgage.