Investment Info:
Single-family residence buy & hold investment.
Purchase price: $89,900
Cash invested: $17,500
Sfr 3/2 located in central Wichita
What made you interested in investing in this type of deal?
I'm currently building my portfolio. I had closed on my first property on October 1st and already had it rented by Nov. 1. So, I got that itch late October, and put in another round of offers and this one was accepted.
How did you find this deal and how did you negotiate it?
I found it on the MLS. After the first couple of months of trying to low ball and having the market bid at asking and up, I started to go in at asking with closing costs put on the seller. For this property I went at asking, with that stipulation. They came back at covering half of closing. Since I knew this would be a 1%Plus deal I was good.
How did you finance this deal?
I went through a broker Flatbranch. My agent recommended them. I got a pretty solid rate at 3.6%. There was a hangup in teh 23rd hour. I had initially secured some private money with a promissory note, but the lender said with my D2I being almost capped since they aren't taking my second jobs income or my other rental's. A note/gift would not count or be able to be used to pass. So, in the last minute they allowed me to put down 15% which means I've got about $30 in PMI.
How did you add value to the deal?
The house only had a few minor touch ups. The sellers had remodeled, so there wasn't much I had to do. And in the inspection the sellers took care of all the work that I had requested.
What was the outcome?
I was able to get the home, we listed at $1050, but didn't get the apps we expected. So we dropped to $995, and we just signed the leases. So I carried it for a month and a half. But I ran my numbers and the deal made sense all the way down to $895.
Lessons learned? Challenges?
My lesson learned goes back to the financing and making sure next go around if I'm using private money get it in the account 2 months before I go through the process. So, it's "seasoned". Also, don't get greedy with pricing. I did my homework and I felt it would be in the that $950 range. My PM pushed for the $1050. The difference and losing a month of a rent is about 4-5 months in loss.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Jason Gilstrap is my agent. He's been solid through both purchases. Gives me real feedback on neighborhoods and possible issues of renting and tenants.
My broker at Flatbranch Grace, she made it work with the last second pivot and getting my qualified and to the finish line.
