When I was looking at 123 Main Street, I noticed that the house across the street was also for sale. Once we finished looking at the first house, I asked the realtor to show me 124 Main Street, and we ended up making offers on both houses at the same time.
124 Main Street was newly remodeled; 3 bedroom,1.5 bath.; and 1600 sq. ft. It was ready to rent on day one. Below is some of its financial breakdown at the time we bought it:
Purchase Price: $110,000
Down Payment: $20,000 (18% of purchase price)
Amount Borrowed: $90,000
Monthly Rent: $950
Monthly Free Cash Flow: $210 (22% of the gross rent)
Before we even closed on the house, we had secured its first tenant—a woman who was already renting a smaller unit from us and needed more space. Because we knew she was an amazing tenant, we rented the unit to her for $950 a month rather than our original design of $1,000.
The house required no repairs, and it has been rented every day since we purchased it. With a free cash flow of $210 a month, the property has been a strong investment for us.