2% SFR in Jennings, MO

[Garrett McIntyre]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $27,500
Cash invested: $6,000

This was my first deal with my current business partner @LeeFjord. We met on bigger pockets when he was out visiting in California. Lee resides in St. Louis and he is the boots on the ground. Our goal was to eventually syndicate large multifamily deals but we need a trial run first. We found this deal from a local wholesaler. We initial thought we were going to buy about 4-6 of these similar type SFR from the wholesaler. This was the only property worth moving forward with.

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

Looking for a 2% deal.

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

Wholesaler

How did you finance this deal?

This was a cash purchase. Our initial plan was to roll 4-6 of these into a portfolio loan but that never happened because the ARVs from the other houses did not justify how much rehab we were going to put into them.

How did you add value to the deal?

Mainly small upgrades. Paint, tree trimming, some minor tuck pointing, etc. Lee did all the work himself which saved us a ton of money! Took 2 months to get all the work done and rent ready. We got a 2 year lease signed at $775 per month.

What was the outcome?

2% rule! Currently rented on a 2 year lease at $775/month

Purchase: $27,500
Rehab: $6,000
ARV: $38,000
Cash Flow: $650/month.... Tenants pay all utilities. We pay for insurance and taxes. No debt.
Cash on Cash: +/- 20%

Lessons learned? Challenges?

Be careful with wholesalers! Start small when starting a partnership with some one. Jennings is a C/D class. We found a great little pocket in the area and found great tenants. Take Action!!! Get off the sideline.

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

Lee Fjord. He is a stud and works his butt off. More to come from us!