Cash on cash what ? 1st REI as a newbie. 1.5 years later

[Cedrick Mahieux]

Investment Info:

Single-family residence buy & hold investment in Leander.

Purchase price: $240,000
Cash invested: $4,000

New house in a new development in Leander, TX
Originally 3 bedrooms but added an extra one to maximize rent and cash flow
cash flow was initially $400/Mo but now using a property manager for $100/Mo

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

I wanted to start with a single family home and had some cash to play with for the down payment. The house is new, in a nice community. Close to the action (job, shopping mall and main highways to go out Downtown
In the community, the house is on a quiet street, close to a park

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

I can't take any credit, my real estate agent found it.

How did you finance this deal?

20% down payment + conventional loan, 30 yr fixed rate

How did you add value to the deal?

Added an extra bedroom on the loft that was pretty huge: 3--> 4 bedrooms; still room to have a home theater and extra room for more cash flow.
Also the light fixture in the kitchen looked like you were in an hospital surgery room... not very appealing when you enter in the house because the first thing you see... so put some modern can lights and also added a garage door opener (who wants one you operate manually anyway?)

What was the outcome?

took 2 weeks to find a tenant. I think the addition of the 4th bedroom was definitely a plus. $400/Mo of cashflow but if you look at how Brandon looks at it (the correct way I presume), meaning vacancy rate, HOA insurance etc.... pretty much even... (not the best
but if you consider I never heard about these terms before.... I am still happy about it). Still I think the appreciation will be decent...it will right ? ....guys?

Lessons learned? Challenges?

Are we limited at 100 lines here?
Don't buy or do things emotionally. Be practical. Forget the fancy upgrades. we talk investment here.
Build your team (RE Agent, contractor, broker, ppty mgr...). then invest.
Run your numbers and make sure you understand what you sign. If not, don't be afraid to say no until you are comfy. You are the one getting a debt for 30 years, not the guy asking your $$
Embrace the challenges, they are huge opportunities to learn and get better at it. Do not give up

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

That is the 2nd house ( did primary too) I buy with Delphine Larrouilh and she is the real deal. Very professional, does not omit anything. She works in the client's interest. Her background as an attorney really is a plus: very thorough and knows a lot of regulations related to REI... She definitely helped us a lot in the process
I am also working with a property manager who takes care of everything so I know I lose $100/Mo but the peace of mind I get is priceless