Cozy cottage for seasonal rental, possibly long term

[Dottie Baker]

Investment Info:

Single-family residence buy & hold investment in The Villages.

Purchase price: $129,000

This is a one bedroom on bath single family residence, built in 2000. It has a side patio, a 1 1/2 car garage with laundry. New roof, new a/c. There was a $20000 bond originally that was paid off. Completely furnished and newly painted.

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

I bought this property with 2 other people, basically to help a friend in financial distress. After two years my co-owners backed out and wanted to sell. Selling wasn't working. After a while it occurred to me that this had been a good investment at the time and was still a good investment so I bought out my partners.

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

It took a year to complete the deal. It was delayed by a leak in the roof and an uncooperative bank. My partners just wanted out. I said tell me how much you need. It was less than they put in and allowed me to keep the slush fund we built up with the rent. My bank (I was a customer for 37 years) turned me down for the mortgage I went across the street to another bank and they said "wow, this is a no-brainer" done deal.

How did you finance this deal?

Bank mortgage, I have 50% equity in the property.

How did you add value to the deal?

I am treating it like a B&B type rental. I furnish lots of tourist info, maps and coupons for local businesses. There is a welcome basket with pasta, sauce, french bread, and a bottle of wine.

Lessons learned? Challenges?

Better to do your own deals. Depending on friends can be challenging. We all have challenges but a deal with friends multiplies those exponentially.

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

I would discourage anyone dealing with Bank of America. I believe if a man had made the same proposal they would have said he was a wise investor but because I was a woman and semi retired they wanted pay stubs and proof that I could pay for it with my income if need be, even though it was a rental property. On the other hand, Citizens First could not have been better. They saw the value in the deal right away and did everything they could to help expedite it.