Investment Info:
Single-family residence buy & hold investment in Cibolo.
Purchase price: $219,900
This was a House Hack using a 5 Bedroom, 2.5 Bath 3634 sq ft. SFH located in Cibolo, TX. I purchased this home with no money down as a VA Loan, and paid the asking price of $219,900 with $6,000 in closing costs covered. There was work that needed to be done on the house, including about $1300 of A/C work and a little over $3000 in wood rot damage on the exterior. These were covered under the $6,000 in closing costs, and the rest went towards the mortgage balance. I paid $60.51/sq foot, when I was looking at more complete turnkey homes going for over $90/sq ft on average. I got a lot more house for less money, and I think it will prove fruitful. Time will tell!
What made you interested in investing in this type of deal?
Although I'll only be in the San Antonio area for a relatively short while (about 9 months), I didn't want to spend my money on rent. I wanted to get a jump start on investing in Real Estate, so I decided to do just that! Instead of splitting the rent with other people to reduce the cost of living, I purchased a house and am living in one of the rooms. Right now each bedroom rents for $750/month.
How did you find this deal and how did you negotiate it?
This deal was shown to me by my Real Estate Agent on the MLS. It just came back on to the market after failing to be sold during the financing stage for the second time in a row. The other 2 parties before me negotiated the price from $249,900 to $219,900, so I really didn't feel like much negotiating was necessary. I did ask for $6,000 in closing costs to be covered so that I would not have to pay anything out of pocket.
How did you finance this deal?
I utilized a VA Home Loan, getting a loan for $223,419 @ 3.75% interest with $0 down. I did have to come up with the Earnest Money, and pay for a home inspection and things of that nature, but costs were minimal.
How did you add value to the deal?
I wasn't really looking to add any value currently, as I don't think it'll be productive. I think my money will be better spent on future deals. The floors, cupboards, cabinets, counter-tops, and appliances are all in acceptable condition. I will likely upgrade them at a later point in time, but I'm not in a rush to do so.
What was the outcome?
I am renting two of the bedrooms out to other Lieutenants stationed here at $750 each. When I fill the other 2 bedrooms, the house will generate $3000/month (with me living in the Master Bedroom), instead of the ~$1900/month it would bring in as a rental house on the market, and not giving me a place to stay. Renting out per bedroom instead of the entire house should make the house bring in a lot more income!
Lessons learned? Challenges?
Some people are not as clean as others! There was a ridiculous amount of general cleaning that had to be done that was not appropriate for this sort of purchase. A full trashcan was left behind by the seller as well as leaving a fridge, motorcycle, bulky shelving, a lawnmower, and other things. I was not pleased at all, and will now hire it out. I had to go so far as to take apart the dishwasher and clean it due to it leaving residue on all of the "clean" dishes. I won't make that mistake again!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Sara McCaffrey, who works with Keller Williams Realty was the Real Estate Agent that helped me tremendously with every aspect of the deal. I couldn't recommend her enough. I also really appreciated Mark with MBK inspections as a home inspector. He went above and beyond what was necessary, and did a fantastic job.
