First buy and hold rental property

[Ann-Louise Jeffery]

Investment Info:

Single-family residence buy & hold investment in Lancaster.

Purchase price: $143,400

brick 1908 3 BR, 1 Bath, 1100 sq ft rowhouse in Lancaster City, very close to local hospital and downtown. Hardwood throughout most rooms - new vinyl in bath and kitchen. Grass plot of yard in the back. No yard in the front. Covered front porch. On a narrow relatively quiet one-way street.

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

buy and hold feels like a long-term investment strategy that I want. Hoping for long-term tenants without a lot of turn-over. 30 year fixed provides nice hedge against inflation.

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

on MLS x 1 day - agent took me to it when I asked to see another property. It was the 2nd property I saw with this agent and made an offer that night. Offered asking price, based on agent's recommendation - glad I held firm when I was told there was another comparable offer and was able to waive appraisal contingency to make my offer more attractive. Negotiated for inspection findings, but not enough (see below).

How did you finance this deal?

traditional 20% down, 30-year fixed residential loan with local bank

How did you add value to the deal?

Rehabbed the kitchen (new IKEA cabinets) and fixed the toilet/replaced sink in bathroom - the contractor who sold it put a brand new bathroom vanity in but none of the contractors must have bothered to sit on the toilet and see if it fit your knees when sitting on toilet - totally awkward and would NOT work - had to replace that brand new vanity with a small sink (no base) - grrrr.

What was the outcome?

almost done rehab as of 4/28/21 (6 weeks worth - would have been quicker without a spring break trip and if I lived just a little closer to the property) - I am an hour away. I hope to get more rent for updates made (plus I feel better about the quality of kitchen/bath). I am about to list property in May and start my journey as a landlord/property manager. Wish me luck!

Lessons learned? Challenges?

Roof repair is expensive. Day of inspection the roof (porch and top roof) were snow-covered. The inspector came back out 5 days later, but it was 3 days after my deadline for inspection negotiations. I negotiated $1500 for the fixes that I knew needed done inside - nothing for roof. it was accepted - no counter negotiation. I would have added at least $2-$3K if I had known the porch roof was in need of immediate repair. IKEA cabinet assembly is time-consuming but fun, once you know how it works!

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

Sheldon Zimmerman, yes, highly recommend.