First SFH - Buy and Hold

[Tony Tolins]

Investment Info:

Single-family residence buy & hold investment in Milton.

Purchase price: $242,000
Cash invested: $7,000
Sale price: $242,000

This is my first investment property. I bought it with the VA loan (0 down) and will close on Nov 6th, 2020. I am house hacking it and will be cash flowing ~$300 after expenses while living there. Once I change duty stations I might manage it myself for the same cashflow or put it under management for about half the cashflow. I have not yet decided on that one as it also depends on if I am able to get higher rent than my current calculations are based off of.

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

This type of deal allows me to eliminate my living expenses while gaining cashflow and equity in a property. It also adds a buy and hold property to my portfolio once I leave.

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

I found this deal on Zillow and worked with a realtor to get to closing. It was a new build so there wasn't really room for negotiating price with the builder.

How did you finance this deal?

I used the VA loan.

How did you add value to the deal?

This is a new construction so not really a value add buy. I will be adding a privacy fence, gutters, fans in the bedrooms, and other small things. Nothing that will substantially increase value though.

What was the outcome?

I have yet to see! This deal should work out and be a great first move in my real estate investing career. However, it has not quite happened yet so we shall see what the future holds.

Lessons learned? Challenges?

The biggest challenge was working with the lender and title company to get my taxes in order. They were using incorrect millage rates and trying to make my prepaid taxes way higher than they were supposed to be. It took a lot of phone calls but I found the correct millage rate for my area and the taxes should be correct going forward. Don't read a high tax bill on your closing disclosure and just accept it! If it seems ridiculous, it probably is!

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

I did work with a great real estate agent in the area. If you are looking to buy in this area message me and I can connect you!