Starting from Scratch

[Sal Bisagno]

Investment Info:

Other buy & hold investment.

Purchase price: $320,000

Primary residence - hacking: currently living in the converted garage of a single-family home built on multi-family zoned property with intention to add an additional 2x1 or 3x2 (depending on build costs) unit at the back of the property and then refurbish/improve the current garage conversion for better personal living conditions and subsequent rental value.

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

I wanted to get out of throwing my hard-earned cash into someone else's pocket and start building some sort of future for myself.

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

I found the property on Zillow after throwing a bunch of ridiculous requirements at my agent.

How did you finance this deal?

VA Home Loan

How did you add value to the deal?

I contracted a builder to remove an old chimney with no attached fireplace, cut back a counter and some cabinets, and open the entryway between the dining room and kitchen to free up space for a refrigerator and better access to the kitchen. Spent three weeks between purchase and first rental making repairs (new toilet, fixed windows so they would open, etc.) and painting and added new appliances for modern convenience.

What was the outcome?

After a little more than four years owning and renting I still live on the property for the price of utilities and have $150k in equity as well as the knowledge and experience gained by managing and maintaining the property myself.

Lessons learned? Challenges?

Landlord - Tenant relations are important when living on the property being rented, NEVER make agreements outside of the lease, NEVER let relations so much as appear as anything other/more than professional, single-family is a slow road to financial independence, older properties can be very time-consuming and/or expensive to maintain, but the most valuable thing I believe I have learned so far is that the value of a quality tenant can far exceed the monetary gain of a small increase in rent.

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

My agent, Amy Peng of KW in Roseville, CA. Neither of us is a one-trick pony and hold multiple jobs as well as investments and we met when I was hired to work for the company at which we are currently co-workers. I cannot find her in the search feature so I guess I need to bring her over to BP.