Larger Rental with Reno Potential

[Chad Brady]

Investment Info:

Single-family residence buy & hold investment in New Braunfels.

Purchase price: $245,000
Cash invested: $47,000

This is a solid rental in a very desirable school district. It rented in less than 24 hrs.

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

This one had a lot of potential for some minor upgrades. This was one of the builders basic packages in their larger floor plans. The home has a half-bath that could easily be converted into a full bathroom. My plan is to convert one of the living rooms into another bedroom/media room and add a tub/shower combo to the half bath taking this from a 4 bed 2.5 bath to a 5 bed 3 bath before I sell it in a few years.

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

I found it on the MLS. I was able to negotiate the price down because I found out the owner had a bad experience with her previous tenants and wanted to be done with real estate investing.

How did you finance this deal?

Conv 30yr fixed with 20% down. I used the equity from another rental and was able to defer taxes with a 1031 exchange.

How did you add value to the deal?

I allowed the tenants to install ceiling fans and paint. I purchased the materials and they did the work. They enjoyed getting to pick out the fixtures and make it feel more like home.

What was the outcome?

This ended up being one of my strongest cash flowing properties with less down than some of my other rentals.

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

Nick Drake