1st Single Family Rental

[Jason Foy]

Investment Info:

Single-family residence buy & hold investment in Sauk Rapids.

Purchase price: $75,500
Cash invested: $5000

Single Family home purchased off one bandit sign. I pay a friend of mine, who lives on a busy road in the area I am investing in, to keep and maintain one sign in his yard.

The purchase price was 75,500.00
Invested an additional 25,000.00 in rehab
Currently renting for 1300.00 per month
3 bedroom 1 bath oversized garage in back

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

The owner had a really good location and overall large property for a fair price in this specific market. I would classify it as a type b neighborhood with home values in the 140-170k range

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

This deal was purchased off my bandit sign. I pay a friend who lives in the area to maintain and keep my bandit sign out in his yard. The road he lives on receives a fair amount of traffic. I have had roughly 15 calls total on this sign.

How did you finance this deal?

We used a 403b to take out a 50k loan
We used a home equity line of 20k
We paid the rest cash for closing

We financed the rehab by utilizing a rehab loan from a contractor to replace the roof, some windows, and a door
We financed the other repairs utilizing credit cards

How did you add value to the deal?

The property had not been updated for many years and had several areas in which needed repair.

- Fixed damaged plaster areas roughly 600 sqft total, I had to remove old damaged plaster, install new sheetrock and merge it with the plaster mud tape and texture these areas, mostly ceiling and in closets upstairs where the roof had leaked causing damage to the plaster
- Updated the kitchen
- Updated the bathroom
- New carpet
- Cleaned and painted walls
- Fixed electrical issues

What was the outcome?

Currently rented for 1300.00 per month
Working on the refinance option now
90 days from start to being rented

Lessons learned? Challenges?

- In the future, all trim will be replaced instead of painting
-Time estimated repairs would take was not enough, took 3 times as long than expected
- Its typically easier, faster, and more reliable to replace than to try and repair older equipment
- Most contractors are hard to deal with especially plumbers, building a better network of rehab specialists will be a larger focus on the next deal.

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

This was an off-market deal
We did have a contractor replace the roof, clean out the drain lines, and install some new windows and a new door
We had an electrician help make the home electrically safe for tenants
We had a flooring contractor come in to install carpet in the bedrooms