Rental: Cash Magnet #1

[Taylor Hudgins]

Investment Info:

Single-family residence buy & hold investment in Portsmouth.

Purchase price: $59,000
Cash invested: $6,000

Our small (698 square feet to be exact), but mighty first rental property! We actually got engaged in this kitchen right after we closed, with it's true in-diar-need-of-a-renovation charm. Cabinets falling off the wall, plaster chipping onto the floor, and water heater on the brink of explosion. All the characteristics needed for investing success of course!

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

Our ultimate goal is financial freedom with passive income through rentals, so this deal was the perfect start for us . Our goal is to be able to have our money create more money for many years to come, rather than us working for our entire lives.

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

We found this deal with the help of our amazing investor-friendly real estate agents on the MLS. We placed multiple offers on homes throughout our area, but competing with cash buyers in a hot market can create quite a large bit of competition. We placed an offer the same day it was placed on the market for the full asking price with a 10-day inspection contingency. We then asked the seller to take on the larger ticket items (plumbing, electrical, etc.) after the inspection. He agreed!

How did you finance this deal?

Our first rental was financed through a conventional loan with a local bank here in our market. We were required to put down 20% plus closing costs.

How did you add value to the deal?

Wooo-wee! Great question! We didn't complete any structural changes to the home, but we did update a lot of the cosmetic needs such as refinishing the cabinets, installing a new water heater, paint, carpet, and a new back porch.

What was the outcome?

We are cash-flowing $475/month! Woo-wee! We're hoping to keep this property for at least another 10 years and complete a BRRRR to acquire more homes.

Lessons learned? Challenges?

Bite the bullet and hire contractors, my friend. Our contractors were able to complete projects MUCH MUCH MUCH faster than we were. Our renovation time could have been cut in half (along with our holding costs) if we had started there. All lessons learned.

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

Ohh yesss!!! Having a great team has made a world of difference. Feel free to message me if you're looking for lenders, agents, contractors, or any other awesome real estate ninjas in the Hampton Roads, Virginia area. I'd be happy to pass along their contact information.