First Buy and Hold Property

[Kimberly Wirz]

Investment Info:

Single-family residence buy & hold investment in Bakersfield.

Purchase price: $183,500
Cash invested: $10,000

This home sat vacant for some time and was being sold by an investment company who. The backyard was overgrown but the house only required paint, carpet and landscaping.

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

It was an easy first buy/hold during a time when buyers were paying over the appraisal price for any house on the market, and we secured this under asking. It was before my Real Estate license and career and actually perpetuated learning all I could about Real Estate...still learning!

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

I actually drove buy it after getting slightly discouraged that all houses were receiving offers over asking in a very competitive market. The neighborhood was very nice with excellent schools. The property was vacant and overgrown yard with no landscaping. We called the number on the investors sign, walked the house and yard and made an offer within 45 minutes time of seeing the sign. It was already below market but not advertised well so we were able to negotiate it down only slightly.

How did you finance this deal?

Back in the day of 100% financing. It was a long hold with only four tenants since the date of purchase and fortunately, none were destructive.

How did you add value to the deal?

We landscaped the back and front yard, added custom paint and carpet. Nothing else was needed.

What was the outcome?

I still own the property and it rents well.

Lessons learned? Challenges?

The BIGGEST challenge was the Property Manager I had in place since the I bought the property. I lived two hours away and needed someone with experience to vet the tenants and keep the property up. I trusted the PM and shouldn't have. They cost me more then any tenant. What they promised and what they did were two different things and this after 10 years of service. I am to blame. I trusted them and didn't check up on the house. I got complacent in my trust after so many years. Never again!