First rental attempt turned into a buy and hold

[Corey Welter]

Investment Info:

Condo buy & hold investment.

Purchase price: $182,000
Cash invested: $18,200
Sale price: $245,000

Bought and lived in a condo in Minneapolis with the intention of renting out. Association changed rental guidelines shortly after closing; limiting how many units could be rented. Pivoted to living there with a roommate until it was my units turn. I received a ridiculously great rate for renting out one room, which covered my mortgage payment. After 2 years, the neighborhood started to slide and home values along with it. I decided to sale, and put the profit into trying a vacation rental.

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

Honestly... At the time it was due to lack of inventory.

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

It took months of watching MLS and many, many failed offers to find it. The negotaion was very one sided. I had to offer 5k above asking, had to use their closer and lender.

How did you finance this deal?

Financed through their lender on a 5 year arm.

How did you add value to the deal?

I did nothing to add value.

Lessons learned? Challenges?

Associations and city politics can always change making things harder or easier on you. Always be ready to pivot on your plans.

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

This was supposed to be my first attempt at a rental. Scott Ebel was patient and guided me on my first deal. We looked at nearly 50 properties and about 15 offers until we landed on this one. He was also to sale my property while other like units sat on the market for many months after mine and ended closing thousands under mine. We are now currently working on a AirBnB style lake rental in northern Minnesota.