Second Deal (from 2014)

[Schuyler Witt]

Investment Info:

Single-family residence buy & hold investment in Tucson.

Purchase price: $49,000
Cash invested: $39,000

This was my second real estate investment. Bought with no (personal) money down! Its been a great rental. Buy right and you'll (almost) always win!

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

The gentleman who loaned me the funds for my first deal sent me an email and asked if I was interested in a property that he had rehabbed, sold with seller-financing, and then repossessed as a foreclosure.

How did you finance this deal?

Banks were not lending money for mortgages under $50,000, so a mortgage was off the table. I decided to use a personal loan with Navy Federal Credit Union. I bought the house, rented it immediately, and paid the loan off as fast as I could. (I paid the loan off in 20 months.)

How did you add value to the deal?

I did not.

What was the outcome?

It's been a strong rental. The house appraised for $92K a couple years ago. I am currently taking out a business line of credit against the house to fund BRRRR deals.

Lessons learned? Challenges?

Lesson 1: Out of state investing works! Mitigate your risk with proper due diligence done by trusted team members.

Lesson 2: Find proper property management. I am in the military and hired property management company that proved to be incompetent, but I did not have the time to replace the company and deal with issues. Poor management cost me thousands of dollars during a turnover period.