Deal 2: Long Distance by Faith, Not by Sight.
Committed: $27K · Current Equity: $76K–$81K
STRATEGY
Buy and Hold
PROPERTY TYPE
Single Family
ACQUISITION
MLS — Competitive
ACQUIRED
2021
OVERVIEW
By 2021 I was getting more confident.
Deal 1 was closed. The model was built. I had been saving to replenish cash and prepare for the next move.
I did not have a fully defined buy box yet. But I knew the strategy. Buy and hold.
The problem was my market.
I live in a top 10 DMA. Buy and hold does not pencil the same way in a major metro.
So I started looking at submarkets and tertiary markets within driving distance.
This deal came out of that search. And it taught me something I did not expect to learn.
HOW I FOUND IT
At this point I was heavy into auctions.
I had my agent attend an auction in a submarket. We came up with nothing.
Since it was a long drive to come back empty handed, I had them look at other properties in the area.
That pivot led to this deal.
The property was highly coveted. Multiple offers on the table.
My agent wrote an escalation clause into the offer — a provision that automatically beats the highest competing offer by
a set increment, up to a stated maximum. In this case, five hundred dollars above whatever came in highest.
I verbally agreed on terms the day before Thanksgiving.
We went under contract on Thanksgiving Day.
The escalation clause worked.
THE PROPERTY
1950s construction. All brick. Ranch style. Around 1,000 square feet.
This broke one of my own rules.
My original plan was to only buy properties twenty years old or less relative to the year of purchase.
This home was decades outside that range.
I bought it anyway. The numbers made the case.
The 1% rule did not clear on this one. The model did. That was the first sign that my underwriting was maturing beyond a single screening metric.
HOW I UNDERWROTE IT
By this point I had built the initial model for Deal 1.
I was refining it deal by deal.
For rent I used multiple sources. A paid software platform. Several aggregator sites. And I called local property
managers directly to ask what rents they were seeing in the area.
For taxes I pulled the last annual tax bill from public records and added 20 to 30 percent to build in a buffer for reassessment.
For insurance I called and got actual landlord insurance quotes rather than estimating.
The model showed positive cash flow. Thin, but real.
FINANCIALS
THE MORTGAGE
WHAT I PROJECTED AT PURCHASE
The underwriting that got me to yes
THE MINDSET SHIFT
I did not see this property before I closed on it.
That sentence would not have been possible before this deal.
Before this, no way I would have committed to a purchase without walking the property myself.
I had my agent walk it. I trusted the model. I trusted the process.
And I closed.
That is how almost every deal I do now works.
I still have an agent or property manager walk the property before I move. But I no longer travel to see it first.
This deal did not just add a rental to the portfolio. It changed how I operate.
Walking by faith not by sight.
Not blind faith. Faith in the due diligence, in the numbers, in the analysis.
Faith that doing the work would be enough.
WHAT WENT WRONG
Not much. That is not always a good thing.
The same original resident is still there.
Minor capex along the way. Nothing that broke the deal.
But this is a 1950s house.
The systems are aging. The roof has years left but not unlimited years.
At some point you catch a falling knife. That is the property game.
I have not caught a brick on this one yet. I know it is coming.
The question is not whether something will go wrong. The question is whether the equity position absorbs it when it does.
RETURNS
Cash flow has been modest but positive.
The real story is the same as Deal 1. Equity.
EQUITY POSITION
Appreciation is doing the heavy lifting here. Debt paydown has been modest — this deal is only a few years old. The equity story gets stronger the longer it is held.
THE SCOREBOARD ( FROM $27. 3K DEPLOYED )
$76K – $81K equity
Appreciation: $39,500 – $44,500
Debt paid down: ~$9,200
Cash flow: modestly positive
The equity is estimated. The cash flow is real but thin. The mindset shift is the part that does not show on a spreadsheet.
WHAT I LEARNED
The 1% rule did not clear. The deal still worked.
That forced me to trust my own model over a shortcut.
Breaking my own age rule on the vintage taught me that rules exist to protect you from bad decisions, not to replace judgment.
The escalation clause was a tool I had not used before. It worked. Now it is in my toolkit.
And the biggest lesson was not in the numbers at all.
I learned I could close a deal I had never seen in person.
That changed everything that came after it.
Every rule I set for myself existed for a reason. This deal taught me the difference between a rule that protects you and a rule that limits you.
Knowing which is which is the art part.
WHAT COULD HAVE MADE THIS DEAL STRONGER
A defined buy box before entering the market — I was still refining as I went.
A deeper capex reserve built in from day one given the vintage of the property.
A stronger net income target — $85 a month after tax leaves almost no room for capex. Underwriting to $200 or more per month would have built in a real buffer for the unexpected.
A local contractor relationship in the submarket before closing, not after.
GLOSSARY
Escalation Clause — A provision in a purchase offer that automatically increases your bid by a set increment above any competing offer, up to a stated maximum. Used in competitive situations to win without over-paying by a fixed amount.
NOI — Net Operating Income. Gross rental income minus operating expenses, before debt service. The number that tells yo whether a property runs at a profit before the mortgage is considered.
Buy Box — The criteria an investor uses to filter deals before underwriting. Property type, location, price range, age, condition. A defined buy box saves time and prevents emotional decisions.
Capex — Capital Expenditure. Large one-time costs to the property — roof, HVAC, plumbing, electrical. Not routine maintenance. The category that surprises investors who do not plan for it.
Tertiary Market — A smaller city or town outside a primary or secondary metro area. Often overlooked by institutional investors, which can create opportunities for individual investors willing to operate there.
Blueprint Cee
Nothing here is financial, tax, legal, or investment advice. I am an investor sharing my own experience and what I have learned. I am not an accountant, financial advisor, or tax professional. Numbers are estimates based on my own records and may not be exact. Always consult a licensed professional before making investment decisions.