Rental #3 -- first FSBO purchase

[Heather Schmidtknecht]

Investment Info:

Single-family residence buy & hold investment in Winona.

Purchase price: $119,000
Cash invested: $5,000

3 bedroom, 1 bathroom SFR
Rents for $1200/month + tenant pays all utilities and is responsible for lawn care and snow removal.

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

I have two other 3 bedroom houses in the same area and I have realized that there is good demand by families looking for this type of rental in my area.

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

I found this deal by putting the following post on Facebook:

"Tired of being a landlord? I am interested in buying a 3-bedroom home that is or can be rental certified."

How did you finance this deal?

I refinanced my other two rentals for a better interest rate & to get rid of PMI -- and I refinanced them in a way that they are now viewed as a portfolio, and I can easily utilize the equity available by cross-collateralizing to partially/totally fund a downpayment & avoid PMI. Thus, I only needed $5k of my own money to do this deal -- I could have used my equity to go into this deal with zero of my own money, but then I wouldn't have much equity available for another deal in the near future.

Lessons learned? Challenges?

This was my first purchase of a FSBO -- honestly, I was glad that I had the experience of working with a realtor for the first two purchases, as I kind of knew the steps in the process and what to expect along the way.