My first deal - Buy and Hold Condo 2009-2014

[John Butler]

Investment Info:

Condo buy & hold investment.

Purchase price: $170,000
Cash invested: $34,000
Sale price: $221,000

My first bachelor pad. Condo I purchased after the dip in 2008.

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

There were not many options in my region that I could afford.

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

For my first deal, I worked with the same real estate agent my parent's work with to make the purchase. When I sold, I worked with an agent who was my age that I had met through friends.

How did you finance this deal?

My parent's provided me with a cash gift to help me reach the 20% down payment threshold. The rest was a conventional 30-year loan.

How did you add value to the deal?

Sweat equity: I demoed a bathroom, painted all rooms in the house.
Money in: Replaced the Washer/Dryer, replaced carpet prior to sale
Buy the dip: I was lucky with my timing. This was possibly the lowest price any unit in the community sold for and I was able to live here cheaply while prices/equity returned.

What was the outcome?

During the time I lived here, I met my wife (now deceased). Although the condo had ample space, we grew frustrated with parking, trash and neighborhood issues and decided to sell the condo. The proceeds would fund my next deal.

Lessons learned? Challenges?

Condos are very tricky to sell. When it came time to sell mine, the owner-occupant : investor ratio was dangerously out of balance. As a result, buyers that bid on my condo found that banks would not fund conventional loan products. This limited our pool of buyers to those that had VA or cash-only offers.

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

Rot Ouy - Samson Properties