Investment Info:
Single-family residence buy & hold investment.
Purchase price: $165,000
Cash invested: $16,500
Sale price: $220,000
3 bedroom vacation rental property in a large complex with pool and short walk to beach. Strategy was to rent it out weekly during peak Summer months and monthly during off season.
What made you interested in investing in this type of deal?
Being from Boston the price to invest in North Carolina was what got us interested. We knew we could hire a property management company to handle everything.
How did you find this deal and how did you negotiate it?
Local real estate agent. Property was on the market for awhile and we did not have a lot of competition. The asking price was already low so not a lot of room to negotiate.
How did you finance this deal?
FHA 10% 50/50 with partner.
How did you add value to the deal?
Added new floors, updated TV - flat screen on wall. Added 2 bunkbeds to a room that previously had only 2 single beds.
What was the outcome?
After a year of producing a little income from rentals but not enough to cover monthly expenses we sold. We sold because we kept an eye on the market and discovered the the market took off shortly after we purchased the property. We decided that the money we would make would be better invested elsewhere. We sold it for $220,00 - a $55,000 profit.
Lessons learned? Challenges?
When running rental number we favored looking at best case scenarios in terms of rental occupancy. This cut into our monthly cashflow when we didn't hit our occupancy goal. We did make sure that we could afford worst case scenarios with our monthly income from our jobs. We also bought so low that it allowed us to resell for a profit in a short amount of time.
