2nd Investment Property

[Chris Baxley]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $425,250
Cash invested: $107,000

We used equity from our first Rental Property, which I had purchased and lived in with a no-money down VA Loan before my wife and I met and were married, to use as the down on this, our second property. It is in a trendy neighborhood in Nashville that was at the time about 50% of the way through turning over from an old working class neighborhood to lot of 'tall skinnies' that attract young professionals.

The only contingency in the contract that I included, other than inspection, was that the prior owners allow me to market and show the home to potential renters. I had it rented, before I took possession and it hasn't had a single day of vacancy since it was purchased in 2017.

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

This was our second buy and hold single family home, our first is a home that I owned prior to our meeting and getting married. We rented that first home for 4+ years before I turned to my wife and said "You know, this REI thing is working for us with the one home, let's add a second". Fortunately she had grown comfortable with it by that time and we started the search that led to this one.

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

Retail Broker

How did you finance this deal?

Used a HELOC from our first rental for the down and conventional financing for the rest.

How did you add value to the deal?

The house was in great shape at time of purchase. It was build the year before and was essentially new. I marketed and had it rented before we took possession. I took the keys from the prior owners one day and handed them to our tenets that same day.

Lessons learned? Challenges?

The only 'lesson' that I would say came out of this is that we should have started expanding our portfolio sooner. One reason that we didn't is that I wanted to have my wife fully on board (she's more apprehensive about big decisions than I) and after four years with our first home, she was. Now I'm starting to be a little more aggressive with her on future portfolio expansion, but I've built the trust up such that she knows I'm on top of the numbers and not exposing us to undue risk.