Long-Distance investment - 1031 exchange

[Frank Rubino]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $176,000
Cash invested: $44,000

I sold a rental property I owned for many years and used the equity to make a 25% down payment on this single family home in Oklahoma City. I completed a 1031 exchange to avoid paying capital gains tax. The house is rented at $1350/month, providing cash flow of $330 per month.

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

My rental condo was not cash-flowing very well, but had significantly increased in value. So, I decided to do a 1031 exchange into a single family rental home that would cash-flow strongly, and have the potential to increase in value.

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

I was interested in the Oklahoma City rental market because of their strong population growth, and strong economy. I networked with a realtor in the area that I found on Bigger Pockets.

How did you finance this deal?

25% down payment and 3.3% interest 30 year loan.

What was the outcome?

So far, so good!

Lessons learned? Challenges?

The 45 day deadline on the 1031 exchange was a challenge. Finding a quality property manager is a must when investing long-distance.

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

Cassi Justiz of Spearhead Realty, and Two Doors Property Management, both based out of Oklahoma City, have been great to work with.