My First Rental Property

[Kevin Elworth]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $57,000
Cash invested: $57,000

A super sweet cape cod that needed every bit of rehab.

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

I knew this property would come with built-in equity if I could just provide the sweat. After 6 months of sweat, my hard work paid off.

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

We found this just by constantly looking through available properties online.

How did you finance this deal?

Having just read Rich Dad, Poor Dad, I was determined to find ways to go completely OPM and it worked. Through a previous deal on our own home, we had 27K in an HELOC. I had an additional Personal Line of Credit for 20K. On whim I tried to see if I would qualify for a signature loan for 50K and to my surprise, they gave it to me. With a purchase price of just 57K, I had more than enough cash to make the transaction happen.

How did you add value to the deal?

Renovate, rehab and refit. Everything in this house needed to be done. After years of series neglect, this house needed new joists through 70% of the floor aside from a new kitchen, an expanded bathroom, and tons of paint. We also added HVAC throughout and dressed up the curb appeal.

What was the outcome?

After 6 months of hard labor, this previously cat and rat-infested failure of a home was rented within 1 week of putting a sign in the yard and netting $450 a month in profit.

Lessons learned? Challenges?

Better control costs. No challenges, but I should have called in different help to more streamline the process and turn the deal faster.