The Numbers
Deal Details:
- Purchase Date: January 2018
- Purchase Price: $110,000
- Cash Invested: $29,000 (20% down payment + closing costs)
- Current Market Value: $130,000
Monthly Profit and Loss:
- Rental Income: $1,300
- Net Cashflow: $430
Metrics:
- Cap Rate: 8.3%
- Cash on Cash: 17.9%
The Story
Why did we buy this property?
You should never change a winning strategy, right? After buying our first two deals in Lakeland (see: The First Deal, The Headache), and later on venturing into Orlando, we decided to revisit the Lakeland market in late 2017. Our Lakeland agent gave us a heads up that another property came into the market in the same community where we bought our first two deals. It was identical to our 3br/2ba, and for the same price, hence we decided to buy it. By then, the rents had increased but the prices of the property were still the same, making our decision to buy fairly easy.
Lessons learned
- Never be desperate to rent a unit, an empty unit is cheaper than the wrong tenant – our first tenant had to break the lease early due to a job change. Suddenly, we were faced with a vacancy. After a few weeks showing the property, we got desperate. In the end, we decided to rent it to an unqualified tenant. To make the long story short, the tenant vacated the property, destroyed the house, and ended up costing us more money than leaving the house vacant. Since then, the property has cashflowed well, hence, it’s our roller coaster.
