Why I liked it
High rent-to-price ratio and it was in my budget! It was twice the size as my primary house at the time in Virginia, but was less than a quarter of the cost. Buying it as a turnkey felt much less risky being a newb investor.
Deal structure
Purchased in my own name with a conventional mortgage and using my own savings for a 20% down payment.
Deal outcome
The property was far from a turnkey. I closed in September and didn’t have a tenant until February, and when it did get leased it was $50/month less than advertised. I did not get any sort of warranty or guarantee from the provider but after months of haggling they did reimburse me for my mortgage payments during the time it was unrented.
There have been several maintenance requests due to the poor work in the renovation and I decided to sell it and take a loss to get a chunk of money back that I could turn into a more profitable investment elsewhere.
Projected Numbers
Purchase: $96,000
Rent: $950
Year 1 Cashflow: $2,100
Year 1 Cash on Cash: 9.5%
Actual numbers
Purchase: $96,000
Cash Outlay: $23,000
Rent: $900
Year 1 Cash Flow: -$5,116
Year 1 Cash on Cash: -9.2%