Rental Townhouse Purchased on a Backup Offer

[Kristopher Kyzar]

Investment Info:

Townhouse buy & hold investment in Portsmouth.

Purchase price: $60,000
Cash invested: $12,000

2 Bed, 1 Bath townhouse purchased as a rental.

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

High rent to purchase price.

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

I found it on the mls. It was already under contract, but I put in a backup offer for $5k below asking. The original contract fell apart, and I was able to purchase.

How did you finance this deal?

Personal loan for $60K with $12K check at closing.

How did you add value to the deal?

Spruced it up a little and immediately got it rented.

What was the outcome?

A property added to my portfolio that will cash flow $375 after refinance.

Lessons learned? Challenges?

Backup offers are worth putting in. Sometimes when you've purchased 3-4 rentals in the recent past, even commercial lenders won't do the deal. Time to refinance to raise my DSCR.

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

Got a personal loan from one of the contractors I use on flips when the bank financing fell through.