The Preacher's House Rental/Agritourism

[Garrett Balsick]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $58,500
Cash invested: $17,500

"The Preacher's House" This house is on 6 acres with an outbuilding. It was trashed when we purchased it. We tore down a building, terraced the property, did a full remodel, buried all the trash and debris that was left behind, and still have work to do. We were originally offered this property in September for 200k because I had negotiated a first right of refusal when I was in high school with the current owner. I didn't even make a counter offer to his offer. He called me and said he wanted to sell it to me and after inspecting the house, I didn't know if I even wanted the house. Foundation has issues, roof has issues, siding has issues, electrical and plumbing have issues. But all parts are functional. This property has a brand new well and is on 6 acres that attaches to our ranch. The house was built in 1921 and has been added on multiple times when money was available. Originally my great uncle Mike built and lived in this house. When grandpa bought the farm he couldn't afford the house and we were able to bring it back into the family 2 generations later.

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

This property attaches to our ranch, and was owned by our family at one point. I was grateful to get it back.

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

I negotiated a first right of refusal when I was in high school. When it came to pricing, I found reputable contractors to give me a bid and showed it to the seller to which their jaw dropped and we were able to agree on a price.

How did you finance this deal?

I took a second mortgage on my primary residence to own this house free and clear.

How did you add value to the deal?

Sweat Equity.

What was the outcome?

A rental property that will continue to serve as a cashflow until we decide to sell it to someone we are happy to be a neighbor to.

Lessons learned? Challenges?

Full remodels are more time consuming and expensive than you expect, no matter what.

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

Farmers State Bank of Ellicott was my lender.