House #22 – Getting a Great Buy and Hold from a Prior Connection

by Stealthy Rich · Published May 27, 2019 · Updated December 28, 2019

April 2015

23010 Vilest Admirer – A Great Buy and Hold Rental

After getting House 21 stabilized and rented, we were ready for another project! One day out of the blue, the prior owner of House 17 called us up and wanted to sell us his other house in the neighborhood. The experience was so seamless and pain-free the first time, he decided he wanted to do it again with us. We were happy to oblige. 23010 Vilest Admirer was a four-bedroom, two bath, 1,815 square foot house with a two-car detached garage, and it was built in 1972. It also already had a renter in it paying $1,150 a month.

Rental House Pics

(Sorry they aren’t the greatest, these are still before we graduated to a professional photographer.)

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Financing of the Deal

We only did “one” closing on this deal as we had enough cash to close it with a traditional portfolio loan from our local small bank. We got this one for $91,150 with 3,000 seller contributions, so really like paying $88,150 for the property. Our loan was a 20-year note with a 7-year balloon at 4.750%. With a loan amount of $73,000, and all our closing costs and such, it meant we needed to bring about $17,300 to closing to make this property ours. This figure included the first year of insurance and a few other things. As you can see from the HUD below the owner also transferred over a $2,300 deposit from the tenant as well. Our payment on this note is $475.12 per month.

House #22 HUD

Final Analysis

Because we had a tenant already this situation meant we had to do ZERO repairs. This situation is great, wish we could get 50 more. The tenant’s lease keeps going just the same, and we start collecting rent on day one. All in we are at about $90,000. This price gives us a rent to price ratio of 1.27, which is great. $1,150/$90,000=1.27.