The Numbers
Deal Details:
- Purchase Date: December 2016
- Purchase Price: $102,000
- Cash Invested: $36,100 (28% down payment + closing costs)
- Current Market Value: $125,000
Monthly Profit and Loss:
- Rental Income: $1,225
- Net Cashflow: $400
Metrics:
- Cap Rate: 7.4%
- Cash on Cash: 13.3%
The Story
Why did we buy this property?
This was our first investment property. After reading books by Robert Kiyosaki (Rich Dad Poor Dad and Rich Dad’s Cashflow Quadrant) and finding BiggerPockets.com, we made the decision to buy our first investment property to generate passive income. We came across this townhouse through Juan’s family who lived in Lakeland FL.
The property is located in a class B neighborhood in Lakeland, where the population and economic growth was improving. In fact, in 2019 Lakeland was ranked #1 city poised to rule on Realtor.com.
Finally, as an investment, the property’s cashflow was attractive based on the 1% rule (monthly rent / purchase price).
Lessons learned
- The first deal is the scariest, but you just have to do it and avoid analysis paralysis.
- We used a property manager on the first year, and quickly learned the importance of having a good property manager.
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