Single family BRRRR **section 8**

[John Stewart]

Investment Info:

Single-family residence buy & hold investment in Chattanooga.

Purchase price: $73,750
Cash invested: $16,000

Found this house off market, it had a long term section 8 tenant in the house. I don't really like SFR, but this one was too good to pass.
The value is easily 100K+, the rent gives me 200/month extra cash flow, and it in a part of town that is rapidly becoming a very hot area to invest in. Besides, if we are entering in to an inflationary period, I would rather make a return on my cash invested (15% C.O.C. roughly)

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

I gained $30k in equity by purchasing the house, and i am making a nice return until I sell it backed by the government.

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

Off market, by writing a letter. This one took 9 months to close, because corona shut down everything in the spring when I was trying to close the first time.

How did you finance this deal?

I used a little bit of investor capital I had sitting, and the rest was capital I had left from a refinance. I secured a commercial (asset based) mortgage on this house, the rate isn't the best, nor is the term, but if it cashflows like this now I will be set when I refinance into better financing.

What was the outcome?

The outcome is TBD. I know I can list it to sell for $100k minimum, however, I like the idea of holding an asset until we see more stability in the economy. Rentals will not lose value like the cash in an account may.