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Updated over 5 years ago,
Small sized buy hold for cash flow and appreciation
Investment Info:
Single-family residence buy & hold investment in Philadelphia .
Purchase price: $110,000
Cash invested: $25,000
Our development company, D2-2 Development Inc. bought this 2/1 sf with a walk out basement as a buy hold.
It needed to be cleaned out, new kitchen and bath, new windows, and finish the large room in the basement that leads out to the large back yard. This basement room adds useable sf to the house, so we get rents at $1400, tenants pay utility.
This past year we had to replace the water heater.
It's in a good neighborhood up and coming.
What made you interested in investing in this type of deal?
Cash flow and appreciation.
How did you find this deal and how did you negotiate it?
This was found by an agent friend of ours. It had been sitting for some time. Absent owners/sellers. Did not show well.
How did you finance this deal?
Commercial lending for purchase and acquisition, rolled into a 25 year fixed.
How did you add value to the deal?
We cleaned out the house, renovated the kitchen and bath, new vinyl floors and carpeting, new windows, added finished space in the walk out basement. We improved curb appeal.
What was the outcome?
It cash flows well and it's easy to rent because it's nicer than other rentals in the area. We expect it to provide a nice nest egg at our retirement.
Lessons learned? Challenges?
It was an easy deal. We have been doing this a long time and have experience. The hardest part was finding something at the right price. Things are very inflated at the moment. I think the biggest take away is make friends with good agents, tell them what you need, and they will keep an eye open for you.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes! I have a long term relationship with the folks at Elfant Wissahickon. Very nice folks and they "own" segments of the local market. Their business culture is very relationship oriented. They are in it for the long term.