Buy and Hold Rental #2 for 2019

[Rich Hanlin]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $403,000
Cash invested: $80,600

Buy and Hold Rental Number 2 for 2019.
My wife and I purchased a home that we are putting our son in and 2 of his friends. I was the real estate agent and I was the loan officer so we will recoup a large chunk of our outlay at COE. We will do our own Property Management on this one.

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

Our youngest son was wanting to move out and rent with his friends and we were looking for a California rental .

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

On the local Metrolist. I am a licensed broker and own both a real estate company and mortgage company so I was the Buyers agent and the loan officer.

How did you finance this deal?

I own a mortgage company so by adding my son on the deal we were able to go owner occupied pricing. We took a interest rate that the lender paid all the closing costs as well as a 2.25% Loan Officer compensation. The real estate compensation was 2.5%. We did a 20% Down Conventional 30 year fixed with no impounds as the lender paid both our insurance and property taxes for 2020.

How did you add value to the deal?

Value add for me is that I own my own real estate company and mortgage company so I can recoup a large chunk of our down payment at COE as well as set up the loan so that the lender covers all our closing costs.

What was the outcome?

Transaction is closing Monday December 23rd.

Lessons learned? Challenges?

In hindsight I should have moved money from my HELOC to a TD Ameritrade account that I keep a small amount of money in verse my personal account. Having to show 2 months statements allows the underwriters to review every deposit and make you source them which can be cumbersome.

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

A shout out to Nighthawk Whole House Inspections.