First Property Purchase

[Payton Pearson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $69,900
Cash invested: $15,000

This property is currently being Airbnb'ed and cash flowing like a boss! Monthly returns range from $600 to $1000 on a $670/month mortgage.

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

It was near my church at the time, Grace Christian Fellowship, very large, and well-maintained for the area.

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

I drove by it, did no negotiating. It was my first-ever purchase, so I felt it necessary to not even attempt at negotiating other than to ensure I wasn't getting raked over the coals (which I wasn't).

How did you finance this deal?

I paid 7.5% down, and paid PMI for a few months. This was my first-ever home purchase, so I was able to grab it for less than 10% down.

How did you add value to the deal?

I have been constantly renovating little (and some big!) things on this property since I purchased it. Just recently I had a contractor cut down some trees in the backyard that were making a mess of the area and preventing the grass from growing. Some species of tree in my area have evolved to shed branches to avoid collapsing when we get ice storms. This is a species of tree that has done that, and it makes a mess.

What was the outcome?

Property is cash flowing like a king!

Lessons learned? Challenges?

Make sure you have a real estate agent that doesn't just do it as a hobby, and knows what they're doing. I probably could have negotiated the price down to $60k or even less. Owner was motivated in their selling of the property.

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

Phil Forbes is my loan officer. I have been using him ever since. He is very trustworthy, and always gets me the best mortgage rates. This mortgage was 3.85%.