My first investment property/home

[Adrienne Boykin]

Investment Info:

Single-family residence buy & hold investment in Washington.

Purchase price: $97,000
Cash invested: $100,000
Sale price: $975,000

I bought my first investment property in '99 for 97k with a 203k loan for total of 247k (purchase price and renovations) I lived in it and fixed it throughout the years as I went on to purchase other properties. I begin doing airbnb in the basement in 2015 until I sold it in 2019.

What made you interested in investing in this type of deal?

It was my first home and my first investment deal. I didn't like it at first. It was abandoned for about 4 or 5 years. But I saw the potential when I walked through the home. My agent at the time (my aunt) painted the picture of finishing the basement and using it as income which I finally did 5 years into it. This home/investment allowed me to see the value in having equity in your home. I then turned that around and used some of the equity to purchase other rentals.

How did you find this deal and how did you negotiate it?

At the time, my aunt who is a broker found the house for me. She's awesome at finding off market deals. Over the years she built up a value network in the DMV (District, Maryland & Virginia) area. I didn't realize how important that skill is until recently. The owner wanted 80k. A few other offers came in a little higher than mine. I offered 97k. They didn't accept it. 2 month later the buyers financing fell threw and they called me back to see if I wanted it for 97k.

How did you finance this deal?

I financed this deal via 203k rehab loan. I didn't know much about them at the time. It was suggested to me by my agent.

What was the outcome?

The outcome of this deal is that over the years as redevelopment and gentrification emerged throughout DC the property values began rising. When the bubble burst in '07 the house was worth 500k. I thought about selling and taking the money to re-invest in more real estate and the market. I kept it until it got to a million.

Lessons learned? Challenges?

I learned so much about fixing up a house in areas that actually increase the value like finishing the basement with a full bath, hire quality licensed contractors to do work (this one was major for me) and be clear about your goals and have an exit strategy wether it's long term or short. Also being familiar with financial vehicles like HELOC's and 203k. I had no idea until much later that a HELOC would benefit me more than an actual cash out refi.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

unfortunately no.