First deal as a newbie

[Eva Neikirk]

Investment Info:

Single-family residence buy & hold investment in Memphis.

Purchase price: $32,000
Cash invested: $57,000

Bought on Auction.com, did cosmetic rehab and have been renting, improving every year.

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

I had cash to invest and wanted to put it into something stable. I followed my mother’s example of buying, fixing and renting to build wealth, read Kyiasaki’s books and got excited.

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

My son lives in Memphis and had purchased a duplex for under $40k. He coached me on what neighborhoods to go for and which to avoid. On Trulia I found a great duplex , but noticed that the house next door was going to auction...$10k starting bid.
My son drove by and confirmed the good location and condition of the house.
I researched county records and other RE sites for info and was encouraged.
I registered for the auction, lost the bid, saw it again next week, bid again and won for less

How did you finance this deal?

Cash

How did you add value to the deal?

Over the years, I have replaced sewer line, water line, 1/2 roof, HVAC, some siding, added gutters, done a lot of cleaning, painting, added ceiling fans, granite countertop

What was the outcome?

Easy to lease, even with rent increases. Great relationships with neighbors. Happy tenants.
I get to visit my son more often.

Lessons learned? Challenges?

I should have bought a professional inspection once I acquired the property, so that I would have had a better prediction on capital expenses.
I need to be there when work is being done...to keep quality up and expenses down.
I’ve put more money into the property than I should have, for a good bottom line, but it will cash flow better in the coming years.
A challenge to keep contractors honest and in-integrity with me out of state.

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

Yes, I use Hiller Plumbing and Electrical and get financing through GreenSky.