In September 2019, my dad and I invested in a single family home that we would eventually renovate and rent out to tenants. He had bought a handful of investment properties prior to this one which we recieve long term passive income from. This house, however, was unique because this was my first investment property.
So, in this blog, I want to share my experience of how we acquired the house.
We were house searching for months before this one came on the market. The owners were asking for less compared to the other homes in the area. We already knew right off the bat that there would be fierce competition for the home.
They had listed the home for $135,000 but the homes in the area were priced between $220,000-$275,000.
I immediately reached out to the agent who was helping us look for another property and we saw it the same day it was listed.
The house was a disaster.
I couldn’t see pass the ugly shaggy carpets in every room or the clutter the previous owner amass in the basement to the most bare bone kitchen with one broke dishwasher that has a ghastly smell that I was unforunate enough to whiff due to my own curiosity.
I know. That was a mouthful.
I looked at my dad after touring the home and asked him what he thoughts were.
He looked at me and said “This one is a hidden gem. We are buying it.”
We were ready to negotiate.
We offered a cash deal and that made our offer more appealing than any of the others. However, we were not exactly sure what the other 7 offers were. My dad has been in bidding wars for other homes previously and he taught me a secret on how to secure any home you were putting an offer in.
The secret was to give the seller a slight higher offer than anyone else.
That’s exactly what we did. We told our agent our offer is $135,000 which is the asking price.
We also said we would give the seller $2,000 more on top of the highest bidder up to $160,000.
Lucky for us, the highest bidding offered was $143,000.
We ended up paying $145,000 for a home that eventually gave us a return on investment of 13%.
If have enjoyed reading this and would like to know how about the renovation behind this home and how we were able to rent it out for $1,900.00 a month then please subscribe! I will be providing all the details in the next blog 🙂