Rent to Own Investment

[Scott Littlefield]

Investment Info:

Single-family residence RTO in Altoona.

Purchase price: $13,000
Cash invested: $29,000

Bought the property that was a gut job in the spring of 2014. I lived in it as owner-occupant until I moved out of state in February 2019. A lease was signed with an option to purchase in June of 2019 with 6% down and am in an up to 3 year deal with the current tenant.

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

I kind of fell into it as the house did not sell after a move and I got a request to do a rent to own. I was previously interested in investing in real estate but wasn't sure I wanted to do long distance.

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

A friend who was an investor assisted in locating the property that was an estate sale.

How did you finance this deal?

Private investor for initial purchase. Cash + HELOC for renovation.

How did you add value to the deal?

A complete renovation of the house and systems.

What was the outcome?

After several years of owner-occupant, a lease with an option to purchase within three years was signed.

Lessons learned? Challenges?

The house was FAR more work than anticipated as the plan was to screw drywall over the existing particleboard. After beginning work, however, it was found the house was not studded in any organized fashion. The particleboard was simply tacked to random boards that were tacked themselves to the frame built out of old railroad boards. So the whole house needed studded/strapped to put drywall up.