New SFR in MPD 35 mins out of Seattle

[Ryan Judah]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $419,950

3/2.5 SFR in the Ten Trails MPD 35 minutes outside Seattle. It's a new home in phase 1 of the development which will be built over the course of the next 15-20 years. The development currently has a ton of parks and will be adding retail in 2020/2021 which is across the street from our investment making it very easy for tenants to live, work, and play without having to drive anywhere. This is a long term buy and hold with significant appreciation potential!

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

I've been watching the Black Diamond market for a couple years as OakPoint worked through the red tape to get the MPD approved. Prior to the development, BD was a small town of less than 5,000 people set among a beautiful backdrop of forests, Mt. Rainier, and much more. This area is very close to the path of progress.

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

I found this deal through the MLS and opted to negotiate the terms without representation. As a result, I was able to get the builder to cover 2% of the purchase price in closing costs which helped buy down the rate.

How did you finance this deal?

Conventional 30 year fixed loan through the builders sister company - Eagle Home Mortgate.

How did you add value to the deal?

I didn't, which is atypical for my investing strategy (BRRR), but wanted to get some money out of the stock market and in an asset that would be a low-headache, high appreciation. I'll self manage (20 mins from my house) and continue building out my out of state investment plan.

What was the outcome?

I was actually able to rent out the house prior to closing and will be receiving 5 weeks of rent before my first loan payment is even due.

Lessons learned? Challenges?

While I knew the HOA would pinch my returns, and potentially be difficult, I didn't expect them to cause so much grief in approving my lease and tenant. The leading reason being we're on the second rental in the development and they are still working out their process. Frustrating, but we'll get through it and our tenant is more than patient!