Buy and hold strategies - what and why

[Greg Weik]

Investment Info:

Single-family residence buy & hold investment in Centennial.

Purchase price: $500,000
Cash invested: $100,000

Single family home in a desirable Denver suburb with no HOA. Consistent rent, stable tenants, stable appreciation. This is the ideal buy and hold.

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

A single family home in an established neighborhood (with above average home prices) and no HOA is the golden investment for a few reasons. 1) Rents are high and demand is very high. 2) The demographic of tenant is desirable (high income, high credit), 3) The demographic of tenant is very unlikely to cause damage, 4) The demographic of tenant is likely to stay for a long time, 5) The high purchase price means appreciation and equity-build come at a greater clip, etc. etc.

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

Open market. Negotiation was unnecessary and is often over-rated.

How did you finance this deal?

30 year fixed, $100,000 cash down at closing.

How did you add value to the deal?

Turnkey - the home has already gone up about $100,000 in value just by owning it.

What was the outcome?

Long-term wealth building play.

Lessons learned? Challenges?

Challenges? Coming up with over $100,000 on each of my properties to put down. So far I'm making it work, but I realize this is not possible for most.

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

I own a residential property management company, so I knew the numbers backwards and forwards going into it. Home was rented in 1 hour and has been rented 3 years and counting without interruption.