Primary Residence to an investment property

[Joseph O. Reed IV]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $218,000
Cash invested: $9,000

Bought home as primary residence (4bd/2bth originally). Not using 4th bedroom so took out a 0% interest credit card and used it to turn bedroom into an ADU with a bathroom, kitchenette, fridge, etc. The credit card debt is gone but the cashflow remains!

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

We were looking for extra income but couldn't take on another job. We also didn't have significant funds either.

How did you finance this deal?

0% interest credit card

How did you add value to the deal?

Turned a 4th bedroom into a "Studio/Casita/Mother in Law suite" with bathroom and kitchenette. Also replaced outlets to be able to have a microwave and window A/C unit in there.

What was the outcome?

The rent from the studio paid off the credit card debt, but the cashflow is still coming in!

Lessons learned? Challenges?

Learned how to deal with contractors, negotiations, risks of opening up walls (water damaged wood!!). Biggest challenge was probably finishing the cosmetic features (drywall, tiling, bathroom appliances installation, etc.) on my own, many hours of YouTube. Also the initial challenge was convincing my spouse that this was a good idea. The cashflow has definitely changed her mind haha