My first rental property in NWA in this crazy market

[Jingjing Yu]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $180,000
Cash invested: $9,000

I bought a 3 bed 2 full bath in Bentonville recently for 180k. It was tough in this crazy market to find anything under 250k now without going through bidding wars, multiple offers, cash offers, etc. I saw people paying 20% over asking price sometimes, and I just can't compete with those buyers. I have seen so many houses coming onto the market this spring that I thought “this could work,” and in the blink of an eye it’s under contract, off the market, no longer available.

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

My criteria for the first investment:

3 bedroom 2 baths (at least 2 bathrooms for resale value)
In a decent upcoming neighborhood
In the 150k – 250k range
In Bentonville, AR
Some preferred qualities: 1) no major renovations, 2) have more expensive houses surrounding it, 3) fenced-in yard.

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

I found this deal from Nextdoor (believe it or not, for once it was used NOT for losing a pet...). I went in and talked to the seller the next day with two preapproval letters (different amounts) in my car and got a handshake on the price. I then sent him the contract that evening and he signed it.

How did you finance this deal?

I am doing a 5% down 30-year conventional loan @3% interest rate with a local bank.

How did you add value to the deal?

I am adding basic grade stainless steel fridge, standard washer / dryer, and possibly sand/paint cabinets to update it a little. That's it.

Lessons learned? Challenges?

1. Clearly define the search criteria helped me narrow down my searches. I just needed to be patient and wait.
2. Be brave enough to pull the trigger: Put an offer on houses that fit those criteria. You need to trust your gut once the property hits all the criteria. Trust the system you’ve built on the due diligence you’ve done. You NEED to pull the trigger.
3. Know how much you want to offer BEFORE you walk in by calculating comps.
4. Let seller say the price first
5. Play fair with seller

See full details: https://www.jingjingyu.org/how...

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

Arvest Bank - Aaron Beard (loan officer) 479.402.4483
Home Inspector - Kerry Miller 501.650.5136