All Forum Posts by: Ashley Byington

Investment Info:

Townhouse buy & hold investment in Rigby.

Purchase price: $170,000
Cash invested: $18,906

This unit is a brand new townhome located in the Sweetwater Housing PUD in Rigby, Idaho. We are furnishing this townhome to be used as a short-term rental.

There will be a total of 56 units in 14 buildings (4 units/building) when the project is complete. Common spaces will include a large park-like area in the center with hardwood trees, picnic shelters, and a playground. The estimated completion for the development is Summer 2021.

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

We prefer new/newer properties that will require less maintenance and improvements upfront. With the exception of a few things like installing a few appliances, we won't have any major capital expenditures or repairs for some time. These units are in a community with an HOA which maintains the exteriors, landscaping, and snow removal.

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

I worked for a real estate team that listed and sold all of the units on behalf of the developer.

How did you finance this deal?

We worked with a local credit union that offers 10-15% down loan programs (with no PMI!) to investors.

How did you add value to the deal?

We installed a refrigerator, washer, dryer, and shower door in the master bath. Otherwise, nothing was needed to make it "rent-ready." Since this will be a short-term rental I will be decorating, furnishing, and getting it ready for guests to maximize cash-flow.

What was the outcome?

We were able to lock in the sales price of $170,000 by making an offer more than a year before they were completed. Our appraisal was $230,000 so we had additional equity upon closing.

Lessons learned? Challenges?

I'm going to keep an eye out for new developments and opportunities to work directly with builders. I would eventually like to build our own with a construction loan.

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

We worked with Mountain America Credit Union for financing.

Investment Info:

Townhouse buy & hold investment.

Purchase price: $170,000
Cash invested: $1,894,458

Brand new townhome in the Sweetwater Housing PUD in Rigby, Idaho. These units have 3 bedrooms, 2 1/2 bathrooms, and a 2-car garage. They include upgrades such as stainless steel appliances and granite countertops. The development will have common spaces with hardwood trees, picnic shelters, and a playground. This unit will be used as a long-term rental.

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

New construction or homes that are only a few years old appeals to us because they require minimal maintenance. The HOA takes care of all of the exterior maintenance including landscaping and snow removal.

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

I worked for a real estate office who worked with the developer to list and sell all of the 54 units in the development.

How did you finance this deal?

We used a local credit union that has an investor program requiring only 10-15% down with no PMI. We chose the 10% down option with a low 3.35% interest rate. We've used them before to purchase two properties. They only allow a borrower to have a maximum of 3 investor loans so we'll need to refi one of our 3 loans with them in order to continue making purchases with their unique loan products.

How did you add value to the deal?

This unit is pretty much ready to go as-is. We purchased a new refrigerator, washer/dryer, and shower door for the master bedroom. Otherwise, no work was needed in order for this townhome to be rent-ready.

What was the outcome?

The property was listed through my TenantCloud account and shared on Facebook. I was able to have a tenant lined up before closing on the property. They move in on April 1st.

We were able to lock in an excellent purchase price by going under contract more than a year before the townhome was finished. Upon appraisal the townhome was determined to be worth $230,000.

Lessons learned? Challenges?

I will definitely keep an eye out for future options with local builders and hope to eventually build our own units using construction loans.

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

Mountain America Credit Union - they have unique loan programs for investors, perfect for a beginner.

Thanks for replying to my inquiry! We have various investments and have enough to put down to qualify but at the moment it is in various brokerage accounts, etc. Would we just have to show that we have the assets to cover the 30+% or would it need to be cash sitting in the bank?  

@Greg Dickerson

Anyone have insight on how a construction loan would work on a building of 4 townhomes? We've only done standard residential loans for our investment properties, so I don't know how a construction loan would work. 

What are the common terms for a property like that? I know a developer doing a couple subdivisions. I thought it might be worth looking into if we could have the construction loan so that he wouldn't have to obtain a loan or line up hard money for the construction of it. 

 Just mulling over some ideas, thanks for your help!

@Thomas Ingrao

Ask Agent for comps so you know what the market value is. Assessed value relates to taxes and isn’t something that correlates with appraised value or the market value. Good luck!

We have 2 townhomes under contract that will close once the construction is finished in a couple months. We just moved out of the area but I'm thinking about using one as our 2nd short term rental.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $118,000
Cash invested: $12,000

3 Bedroom 1 1/2 Bathroom townhomes with attached 1 car garage and fenced in backyard. We worked with a local lender and did an investment loan with 10% down and no PMI. This property was purchased as a long-term buy and hold investment. *Update, we just did a cash-out refi (mid 2020) to lower the interest rate and we pulled out a little bit more than what we initially invested so now we really don't have any "personal money" invested in the property.

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

The rental market, class of tenants,

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

We were able to purchase this property from a family member who was moving out of the area.

How did you finance this deal?

Investor loan program with local credit union. They were offering 10% down with no PMI, amortized over 30 years with 15 year balloon payment. (We planned to refinance at some point using a traditional loan)

How did you add value to the deal?

This property was only a few years old so we didn't have to do anything right away to get it in rent-ready condition.

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

I represented both sides of the transaction as an agent. We used Mountain America Credit Union and closed with First American Title in Idaho Falls.

@Calvin Kwan

It might just be my experience but it seems that when a rental has crappy appliances I always end up with tenants that aren’t very good. If the property and appliances are cared for, well maintained/updated, etc., they attract better more responsible tenants. 🤷‍♀️

@Brian Ellis

Very exciting, congratulations on taking this new step! Sounds like you’re in a great position for making the move. good luck with everything!

@Nour Hatab

I like new rentals, they attract better tenants and won't have an CapEx for a long time.

That being said, if you can connect with local builders who have upcoming multifamily projects you could potentially get a building under contract for a lot less than if you waited and got it under contract after construction was already under way.

For example, here in Idaho Falls there were triplex listings for new construction that were listed for $389,000. They were like a year out for completion so I drug my feet. Then they bumped up to $425,000 and a couple months later $450,000. We got the building under contract for $425k and the numbers worked but it sure would have been nice to get it for $389k.

Another example near Idaho Falls. My office is working with a builder to list and sell a 56 unit townhouse development. Some folks did cash hard money down upfront to fund construction and got four townhouses (1 building) for $666,000. One buyer I have got a building for $680,000. 6+ months later construction is well under way and units are at $185,000/each ($740k/building).

Long story short, if you have cash, start networking with builders and you can probably get a really good deal. 😀