Single Family Buy & Hold

[Jody Sperling]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $95,000
Cash invested: $20,000

This was my starter house, the first home I owned. My family and I lived there for five years. In June of 2020, we purchased a new primary residence and rehabbed our first house to be a rental.

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

As my first investment property, I knew the house would cash flow. On a small scale, having one tenant seemed ideal so we could learn how to run the business of managing with lower risk.

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

We used a traditional Real Estate Agent and bought off the MLS. The house needed several repairs. We split the cost of a new roof with the previous owners, and negotiated $5,000 off the initial asking price.

How did you finance this deal?

We financed the deal with traditional bank savings.

How did you add value to the deal?

We pulled all the carpeting and replaced it with LVP. We replaced the shower, bathtub, toilets and repainted. The house still has a relatively new roof, water heater, furnace, and AC.

What was the outcome?

We have tenants occupying the home and paying down the mortgage for us. Our property cash flows $378 per month after withholding $400 for future repairs, cap ex, and other maintenance.

Lessons learned? Challenges?

To save money and learn the value of each project we undertook, we rehabbed the home ourselves. I am a terrible painter, a worthless plumber, a horrible flooring installer and pretty much not handy at all. I will NEVER again rehab a home myself. This was a great lesson to learn, and I do know tremendously more about the value of various projects.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used a wholesale agent to purchase my new primary residence. He is also actively working to send me leads as I strive to purchase my next property as soon as possible.