First Single Family Investment Property

[Jake Lilly]

Investment Info:

Single-family residence buy & hold investment in Saint Joseph.

Purchase price: $63,000
Cash invested: $13,000

This was my first deal/negotiation, purchased from another group of investors. I was looking for a property that didn't require too much repair, (as my time is limited) but just enough that I could do the small stuff and increase rent right away. Put around $9500 down, covered closing costs, and had around $500 in repairs. Vacant upon sale. I increased the rent and filled the property within a month.

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

I didn't know exactly what I was looking for. All I knew was that I was tired of looking at properties for the last few years and wanting to take action, but never actually getting anywhere. I had passed on a house these investors were selling and regretted it, so I knew it was time to act. It didn't need major repairs, and based on the numbers I was running, I knew I could use a minimal amount of money and get a decent monthly cash flow.

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

A friend's father in law owned rental properties, and as he was beginning his real estate exit, he was beginning to sell each of his properties as leases came up. As far as negotiating, I walked through the property, and had an idea of what I thought it was worth based on the a few years of researching and the current market. We negotiated a price over the phone while I was at the firehouse. They started at $67k, I started at $62k, and we came to $63,500.

How did you finance this deal?

Conventional Loan with 15% down @ 3.875% fixed rate.