Investment Info:
Single-family residence buy & hold investment.
Purchase price: $119,500
Cash invested: $36,000
The Miller Property is a charming 3 bedroom, 1 bathroom house that dead-ends into a school. The area is in a path of progress and has seen 13% appreciation in the last 12 months. We purchased this house for $119,500 in almost rent-ready condition. After about a small punch list of minor repairs, we were able to find and have a tenant move in 3 weeks after closing
How did you find this deal and how did you negotiate it?
After losing or walking away from a handful of other offers we put in Columbus, our daily MLS search landed us in the Miller house. We initially offered a full list for $115,000 with an escalation clause of up to $125,000. This meant that if anyone beat our offer, we would then automatically increase our offer up to $125,000. With the competitive Columbus market, our escalation clause was exercised and we got the property under contract for $125,000.
How did you finance this deal?
We have been aggressively saving for the past 18 months and were able to put 20% and secure a traditionally backed loan through a local lender.
What did we do right?
We started and bought something. It's not a BRRRR. Yes, we put 20% down. There was no value add, but we started and that's what we did right. It's so hard to pick one strategy or not chase the shiny object.
Lessons learned? Challenges?
Since this was the first one we locked down. Everything was a learning experience. Here are a few of our highlights:
- Spend the most time building your team and learning how to trust them through the shopping process. Our real estate agents/property managers offered us a second opinion on numbers, confirmed why it was a good deal when we started to get cold feet and connected us with contractors and handymen.
- I initially wanted to back out because I thought I was overpaying by $4,000 on the purchase price. However, I learned that if we plan on keeping the property for at least 7-10 years, the amount will quickly be recouped by appreciation, principle paydown, and cash flow.
- You can negotiate everything! Because I thought I was overpaying, everything on the inspection and troubles with the roof were up for seller credits or price reductions. Although we initially locked in the property at $125,000, we negotiated it down to $119,500 after reviewing the repairs that were needed.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Jon Styer and Helen Nilsson at Roost Real Estate
