Achievement Unlocked: First rental property!

[Kyle Kalish]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $125,500
Cash invested: $12,550

Purchased a 3/1 from an accidental landlord who wanted to offload the property as she wasn't interested in being a landlord.

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

I learned that this property had quality tenants already in it and wanted to re-up the lease in August. Being my first investment property I felt this took a lot of the risk off of the table because there was proof of concept. I had to make very few assumptions in my calculator which certainly puts a newbie like myself at ease.

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

MLS; This market is just as competitive as everyone else's, I think my advantage was putting an offer in quickly.

How did you finance this deal?

Portfolio loan; was able to put down only 10% on a 5 yr. ARM, amortized over 30.

How did you add value to the deal?

This was listed as a 3/1 but I noticed there were two additional "bonus" rooms and plumbing was started for another bathroom. With relatively minimal effort I could quickly be owning at least a 4/2! I'll let the current tenant stay in the property in the condition it's in and then once they move out I'll make these renovations. At that point I will be considering listing this as a STR as the market is strong for that strategy as well.

What was the outcome?

We'll have to wait and see!

Lessons learned? Challenges?

Lesson learned- trust but verify! I was told the tenant paid all expenses and was paying $1,150/mo. Come to find out later, the landlord is responsible for water/sewer and rent is $1,075! Thankfully it still cash flows even at that level and I also lucked out that the lease is over in two months after acquiring the property. At which point I'll offer this unit to the tenant at $1,125/mo and they will also be responsible for water/sewer.

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

Jack Cheng with Cheng Realty was great and also Corey Pope with Woodford State Bank did a terrific job as well.