Not all investments have to be house hacks or done with creative financing. Once you get in your stride you can acquire more properties annually by reinvesting your earnings from your other investments. That’s how this deal was done. It was a joint venture between me (Craig here) and a partner of The FI Team.
The House
We purchased a side-by-side duplex in the Slone’s Lake area between Denver and Lakewood in 2020. What we loved about the property is it was already set up for our strategy of a passive long-term rental. There were separate entrances, separate utilities and located in a desirable, easy to rent neighborhood. But even better, we were able to see the potential of unused square footage.
The units were 2 bed/ 1 bath when we bought them, and after a renovation after the purchase both units were 3 bed / 2.5 bath.
The Numbers
Costs
| Purchase Price | $630,000 |
| Down Payment (including closing costs) | $126,000 |
| Rehab | $92,000 |
| Estimated ARV | $800,000 |
We closed on the property in 2020 with an interest rate of 2.25%. I was able to buy down our interest rate with my commission.
Income & Expenses
| Rental Income | $4,175 |
| PITI | $2,100 |
| Reserves | $800 |
| Property Management? | $292 |
Cashflow & Appreciation
| Cash Flow | $983 |
| Principal Pay Down | $15,000 |
| Appreciation | $170,000 |
Cash on Cash Return 5.41%
Net Worth ROI 90.27%
The two units are both long-term rentals being managed by a property management company. Because we renovated upfront to ensure the units were in solid shape and have a management company, this is truly a passive investment for me.
Are you in your investment stride yet? Looking for a truly passive rental? Hit me up, I’d love to help!
