Keeping It In The Family

[Alex Van Slyke]

Investment Info:

Single-family residence buy & hold investment in Astoria.

Purchase price: $225,000
Cash invested: $45,000

A home that has been in the family for over 50 years, we were able to acquire it well below market rates with a 20% conventional loan as turn in in to a rental immediately. Cash flow is significant enough so that we can build a reserve quickly for the home, save for some renovations and updating, the look at get a sizeable HELOC in about a year to reinvest with. 2 Bed 2 Bad can easily be turned in to a 3/3 or 4/3 with no major renovation work. An unfinished daylight basement with a full bath has the potential to rent out as a studio to add even more cash flow. Immediately was able to rent for $1400 to a friend in need with a month to month lease. While she is living there, we will add a half bath to the main level and do some more cosmetic work. Rental market will allow us to rent for $1800+ once she has a place of her own, closer to $2100 when we rent out to the hospital.

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

My wife's grandfather has raised his family there and she swore to him that she would buy it one day. Buying at below market price and the ability to build a lot of forced equity in, the home will fund one or several of our next deals.

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

Grandfather's home that had to be sold in order to pay off the balance for Medicaid

How did you finance this deal?

We refinanced our home and and were able to buy with 20% down as an investment home.

How did you add value to the deal?

We will add a half bath to the main floor, lots of cosmetic touch ups like painting cabinets and removing old wall paper. Also looking to convert the daylight basement in to a separate rental space.

What was the outcome?

As of now its rented out to a friend who is letting us fix up the home while she and her kids live in it with a month to month lease. We will be able to rent it out to the hospital for above market rates within the year.

Lessons learned? Challenges?

It's scary trying to acquire a family home without stepping on toes of family members - tread carefully