Buy & Hold - rental property #2

[Brittany Woosley]

Investment Info:

Single-family residence buy & hold investment in Lyndhurst.

Purchase price: $117,000
Cash invested: $21,500

Rental Property #2! I go into more detail of this purchase in a blog post here: https://mortgagefreeincle.com/2020/11/04/becoming-an-investor/

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

The second property we purchased here in Cleveland was an adorable 3 bedroom, 1.5 bath home in the city of Lyndhurst. It was this purchase that propelled us from homeowners to investors! The charming neighborhood and pride of ownership was evident immediately as we drove around. Since the homes in this area are majority owner-occupied, we knew it would be a great rental area down the line, as well as a great place for us to live.

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

We had an amazing agent (who is now my broker) negotiate this deal for us.

How did you finance this deal?

Like our first purchase, we financed this property with a 30-year fixed mortgage, paying 15% down and received 2% back in seller credit.

How did you add value to the deal?

This house was in great shape when we bought it, all we needed to do was add some cabinetry missing from the kitchen and paint the walls (personal preference).

What was the outcome?

My husband and I enjoyed living at this house. The neighborhood was quiet and charming, our dog loved chasing squirrels and barking at the deer. After 5 short months in the peaceful Lyndhurst suburbs, I listed the house for rent on Zillow. Within the first week, I had a qualified tenant lined up to move in, renting at $1250/month.

Lessons learned? Challenges?

We learned that paying a little more for a rental property located in a higher owner-occupied area can warrant a higher monthly rental price, better tenant pool, and more cash flow.

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

I highly recommend Brian Hartwig from First Equity Mortgage Group as a mortgage lender - he helped us finance this property as well as our next one. He has also helped out-of-state family members of mine finance several investment properties out here.