Long-distance rental with creative strategy (First Deal)

[Niles Emerick]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $68,750
Cash invested: $1,800

Purchased this as my first rental as a long-distance investor because I couldn't afford in my local market. Interviewed a number of RE agents in several cities, and found one in Ft Wayne, IN who was hungry and willing to put in some effort.

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

Affordable market outside of my home market.

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

Local RE agent presented several options that met my criteria within a given price range. I pre-approved a tenant by posting on Craigslist for a 3BR/2BA house at a rental price point that I knew would cover a mortgage amount range. I pre-selected 3homes that met the same criteria for the listing I posted, then had my RE agent tour the pre-approved tenant to the 3 houses and pick the one I would buy. Tenant put deposit and first month's rent down, which I used to cover closing costs, signed leas

How did you finance this deal?

0% down non-owner occupied 30-yr loan, then used tenant deposit and 1st month rent for earnest money and closing costs.

How did you add value to the deal?

Matched a renter with a home for sale.

What was the outcome?

Successful purchase of the home with nominal out of pocket funds. Tenant took good care of the property because they played a role in "purchasing" the home.

Lessons learned? Challenges?

Long-distance management can be a challenge without a local property manager. Had to build my own "black book" of contacts from afar, and get creative on tenant turn-overs by incentivizing current tenant to host an "open house" for prospective tenants.