Investment Info:
Single-family residence buy & hold investment in Austintown.
Purchase price: $25,000
Cash invested: $13,097
Three bedroom, one bath, detached one car garage, front porch, back patio and deck.
What made you interested in investing in this type of deal?
Good cash flow.
How did you find this deal and how did you negotiate it?
I had a friend/colleague who did real estate investing with her husband. He/they had done some guru courses, spending upwards of $10K. I'd been curious about real estate investing for a while so we had dinner with them. He had a presentation for a 2 yr. $2500 mentor program, sharing how he searched for markets and his experience over the years. He was looking to recoup some of what he'd spent. We visited his market, met his PM, and visited another nearby city. Property was Homepath, on MLS
How did you finance this deal?
Paid cash.
How did you add value to the deal?
We did a reno to make it habitable, who knows how long it had been empty. We didn't expect much appreciation in that market, that was clear to us in the beginning. I don't think the property is worth much more, if any, than what we've put into it.
What was the outcome?
First tenant was nutty. Got $775 when we were hoping for $725. She, for no reason, withheld her rent after the first month in a separate account. I think she just wanted out of the lease, which she could have told the PM and we would have let her go. We got all our rent and the security deposit 4 months later and she moved out. Our PM took care of the court appearance. Now we have a girl at $650 from a local program for survivors of domestic abuse. Been 3 1/2 years, all is good.
Lessons learned? Challenges?
One thing we've found, is that these foreclosed houses that have sat vacant for a while, continue to have larger than normal issues for the first 6 months or so after the original reno. We tend to count those costs as part of the original reno, as an acquisition cost. Everything costs more than you expect. We are gonna raise rent at next lease renewal by 3.19% as we haven't done so yet. We were eager to get started, I don't know that I'd buy that same house now, even with same numbers.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Our agent/PM who is not on BP.
