LTR in Panama City Beach #1

[Yolanda Salas]

Investment Info:

Single-family residence buy & hold investment in Panama City Beach.

Purchase price: $114,000
Cash invested: $40,000
Sale price: $189,900

Small 2/1 single family home purchased for LTR. It was a pre-foreclosure just after the market crash. Near the beach. Began rent at $850 and increased it to $1200 a month by the end of the ownership period. Repairs included flooring, paint, roof, AC, kitchen cabinets and appliances.

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

After the RE market crash, I was ready to buy and hold for rental income - goal was to begin a rental income portfolio. I was still working in my corporate job and was able to use leverage.

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

Realtor

How did you finance this deal?

Conventional bank financing 20% down

How did you add value to the deal?

Initial investment to get it ready to rent - paint interior and exterior, replace carpet, replace appliances. Used realtor to final tenants and manage the lease at first.

What was the outcome?

Consistent tenants except first 2 tenants were horrible. I ended up taking on the property management myself after second fiasco tenant and haven't looked back since. We upgraded the kitchen cabinets, sodded the yard, added a sprinkler system on the well and raised the rent by $200, from then on the renters were quality renters that paid and we were able to steadily increase the rental income.

Lessons learned? Challenges?

Tenant screening is a must and never bypass your established processes and standards. I sodded the lawn and had the lawn serviced by a company which is incorporated in the rental price. For single family homes in decent neighborhoods this is a MUST. I did not do this at first with this property so the home was not taken care of and became an eyesore in the neighborhood very quickly. With this house being to cute and close to the beach, I needed to be a good neighbor and consistent with area.