Residence-turned-rental, Alexandria, VA

[Jeff Lee]

Investment Info:

Single-family residence buy & hold investment in Alexandria.

Purchase price: $270,000
Cash invested: $1

Former residence - turned rental

798 SF, 2/1, 1953 build just outside the DC Beltway and near a metro (train/subway) station.

Laminate hardwood-style floors, granite countertops, stainless appliances.

Chair rails and crown moulding in living room.

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

Wanted to get my feet wet in owning a rental after moving back to Texas, and knew it was in a good location and is an (increasingly) rare SFR just outside of DC. Lots of high-rises going up!

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

Real estate agent
Not much negotiating - the market was really hot at the time in Alexandria.

How did you finance this deal?

VA Loan, 0% down

How did you add value to the deal?

Lived in it for 5 years, kept it up, and now have a professional PM watching over it. So not much...

What was the outcome?

After all expenses it breaks even or maybe loses a bit per year, but I get $6000/yr in principal paydown + appreciation (did I mention it is 2 miles from Amazon HQ2?) and all the tax benefits.

I'll eventually 1031 it into a multifamily here in Texas.

Lessons learned? Challenges?

We've had ~$12,000 worth of pipe/sewer issues since we bought it. This guy had orangeburg pipe running from the main cleanout to the road which needed to be replaced ($5K) shortly after moving in. Then a few years ago the cast iron pipe from the main cleanout to the intake under the house finally failed (settling + tree roots), so jack-hammers and fun ensued.

Lesson learned - I dunno - don't buy old houses? Or just expect them to have all sorts of fun surprises.

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

No