Sweetwater Townhome Long Term Rental Unit

[Ashley Byington]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $170,000
Cash invested: $1,894,458

Brand new townhome in the Sweetwater Housing PUD in Rigby, Idaho. These units have 3 bedrooms, 2 1/2 bathrooms, and a 2-car garage. They include upgrades such as stainless steel appliances and granite countertops. The development will have common spaces with hardwood trees, picnic shelters, and a playground. This unit will be used as a long-term rental.

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

New construction or homes that are only a few years old appeals to us because they require minimal maintenance. The HOA takes care of all of the exterior maintenance including landscaping and snow removal.

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

I worked for a real estate office who worked with the developer to list and sell all of the 54 units in the development.

How did you finance this deal?

We used a local credit union that has an investor program requiring only 10-15% down with no PMI. We chose the 10% down option with a low 3.35% interest rate. We've used them before to purchase two properties. They only allow a borrower to have a maximum of 3 investor loans so we'll need to refi one of our 3 loans with them in order to continue making purchases with their unique loan products.

How did you add value to the deal?

This unit is pretty much ready to go as-is. We purchased a new refrigerator, washer/dryer, and shower door for the master bedroom. Otherwise, no work was needed in order for this townhome to be rent-ready.

What was the outcome?

The property was listed through my TenantCloud account and shared on Facebook. I was able to have a tenant lined up before closing on the property. They move in on April 1st.

We were able to lock in an excellent purchase price by going under contract more than a year before the townhome was finished. Upon appraisal the townhome was determined to be worth $230,000.

Lessons learned? Challenges?

I will definitely keep an eye out for future options with local builders and hope to eventually build our own units using construction loans.

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

Mountain America Credit Union - they have unique loan programs for investors, perfect for a beginner.