Newest rental property vacancy filled!

[Chad Lundquist]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $135,500
Cash invested: $20,000

Great 1-1/2 story, 3 bedroom, 2 bath (w/ Den) house in Gladstone. We purchased this house as a one owner (built in 1950!) with the intention of rehabbing and potentially moving into once our 17 year old son graduates HS, but decided to convert it into a rental. We put a lot of work into the kitchen (painted the cabinets, new flooring, new appliances, new sink / faucet, new lighting, wainscoting, new paint) as well as new flooring in both upstairs bedrooms and the basement, new vanity / faucet, mirror, paint in the main bathroom, completely repainted the entire inside of the house and 75% new lighting throughout the house. Just got it rented for about $400 / month more than we originally thought we'd get.

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

We already owned several SFH's and we were looking to put some cash to work. Honestly we thought about moving into it ourselves, but decided that this would make a terrific rental property.

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

Looking thru the MLS my wife found this. We offered full price (cash offer) with no inspection and can close as soon as possible and we included $1,500 escalators up to $6,000 over asking price.

How did you finance this deal?

We paid cash, but are currently looking to put a mortgage on the property in order to pull out the cash that we originally put in the property.

How did you add value to the deal?

Updated the kitchen and bathrooms, pulled out old carpet and replaced with engineered hardwoods (upstairs and basement), repainted the entire interior of the house, new lighting throughout most of the house.

What was the outcome?

We were thinking that we'd be able to get $1,200 to possibly $1,300 / month in rental income, but were able to get $1,575 / month on a 2 year lease.

Lessons learned? Challenges?

We didn't do a great job of working from top down on the property. Also, we didn't start with a hard budget / schedule which lead to the remodel taking much longer than it should have and going over what we thought we'd spend on the remodel.