Poolside Paradise in Key West

[Joshua B Pruitt]

Investment Info:

Townhouse other investment in Key West.

Purchase price: $465,000
Cash invested: $46,500

We came across an awesome investment opportunity in one of our favorite places in the world...Key West, FL. The property is a 2/1.5 townhome on the pool in the Key West Golf Club. We rent it out for 28 day minimum blocks. Used a 10% down second home mortgage.

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

We wanted to be able to have a vacation home that also generates income for us. We love the Keys, and try to go down at least 4x a year. This was a great way to get started with our real estate investing portfolio and possibly have a property for us to retire to. We cash flow about 8-10K/year after all costs, including owner time!!!

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

Our friends own to properties in the same community, and knew a neighbor that was thinking about selling and connected us. He was already represented by a Realtor, but they had not yet listed. I forfeited my commission, and submitted an offer before their Realtor could put together a CMA. I spoke with the seller personally to learn about their motivation and to discover if they were represented.

How did you finance this deal?

10% down, second home conventional mortgage. I do have to occupy the home for 14 days out of the year, and cannot have a lease on the property. That is why we decided with the short-term rental route.

How did you add value to the deal?

I made all repairs noted on inspections, changed furniture, and took better photos. I also negotiated to have the furniture convey outside the transaction to save the seller commissions on that before negotiating repairs. Once inspections were complete, we asked for no repairs in lieu of all furnishing when we saw that the repairs were minor. The seller even went ahead and made most repairs prior to closing that we were going to ask for anyway since they were so minor.

What was the outcome?

The seller wanted us to have a nice home, so as I went around to make the repairs I noted that most were already completed, and then when his handyman stopped by to introduce himself, he told that the previous owner had him come over a week or so ago and make all the repairs.

Lessons learned? Challenges?

We bought this property completely sight unseen. We relied on the inspections and friend/contacts in the area. Doing that was actually a great experience, because now we have the confidence to do it again. Not only that, but we were afraid of purchasing another property, because what if??? Well, if we hadn't bought this we would never have bought anything else.

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

I did work with the seller's agent. As a Realtor myself, I respected that relationship and negotiated with her despite having a previous relationship with the seller's. Jamie Holmes from Movement Mortgage was outstanding to work with and got this deal done for me! He and his team are phenomenal!!!