My 2nd Investment Condo

[Dennis Alves]

Investment Info:

Other buy & hold investment.

Purchase price: $219,000
Cash invested: $12,000

This unit in Lynn (on Lynn Shore Drive) was my 2nd investment in a condo. It's a 1 bedroom, 950 sq feet unit. It's in a building that has 59 units and is professionally managed on the water. The unit has a balcony that looks out on to the ocean. The building has many cool amenities like a small gym, pool, off street parking and additional storage for each unit in the building on the 1st floor. I'm getting $1,700 per month in rent for this unit and making $425 per month after all my expenses.

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

This was a great condo that needed a little TLC (just cosmetic stuff) and I was able to get a great deal on it paying only 219K for it. The taxes and condo fee are low which helped make the ROI with the investment. The building has a lot of amenities like a pool, gym, additional onsite storage for each unit. The build is professional managed as well and it's located right on the ocean.

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

The agent that I worked with on my 1st investment properties was friends with the selling agent on this unit. He gave me the heads up early on this unit and I offered the asking price right when it was listed. I was able to scoop this up with an aggressive closing date but I was also willing to let the owns rent the unit back from me at below market while they looking for a home to purchase but I also knew they wanted to be in a home by June 1st.

How did you finance this deal?

This was a residential loan. I put down 25% and was able to get a 30 year loan with the first 10 years fixed at 3.875%.

How did you add value to the deal?

I used the HELOC from my 2-family home to help make the down payment on this investment. The $400 per month I make in profit from this unit goes back into paying down the HELOC I used to make the down payment.

What was the outcome?

Awesome. I did have to sink about 12K into the unit to update it, but the value of unit was just appraised at 270K and I've had it less then 2yrs. I've had great tenants and have only had 2 weeks of vacancy since renting the unit out. It's been a great experience.

Lessons learned? Challenges?

The first year I asked for $1650 in rent. I was scared to ask for $1700. When the old tenant moved out I pumped the rent up to $1700 and had no issues finding a new tenant. I should have been more confident to asking for the $1,700 upfront that first year renting the unit out.

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

Sean Connelly from Remax in Marblehead was my agent. I used Fairway Mortgage to finance the deal.