Primary home to Rental Property

[Andrew Postell]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $89,000
Cash invested: $8,000

This is a 3BR 1BA home that was purchased as a primary residence. Since it was purchased as a primary residence it had a very low out of pocket cost and it was move in ready. No work needed but we did some minor upgrades to the property. Today it is a rental property that is always rented. Very convenient location. People love the shady trees of this neighborhood. It is an older home so eventually it will be sold to purchase 2 investment properties. That will likely occur in 2023.

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

The price! How can a property be sold for $89,000 and need no work? They were just giving away homes back then so we took advantage of it

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

This was a property right off the MLS. We relied on the real estate agent to find this property and help us negotiate the purchase.

How did you finance this deal?

Since it was a primary home we had LOTS of financing options. So we took a 5% down loan and called it a day.

How did you add value to the deal?

This deal probably didn't have the "value add" that I normally use with my investment properties. Since this is a primary home it had to meet my "personal needs" and the needs of my family. So it was move in ready when we purchased it. Over time we added some cabinets in the kitchen, and built a 6 foot fence for privacy. We also added some more shady/flowering trees to give more shade to the property. So it looks nicer...but not a ton of value add items to this one.

What was the outcome?

Love still owning this property! It's always rented. Tenants love the neighborhood and the property.

Lessons learned? Challenges?

Use that final walkthrough! We had negotiated one item to be fixed on the property. The day before closing we walked the property and it still wasn't completed. If we had not done that final walkthrough we would have purchased the property without that items being fixed.

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

Absolutely! Reach out any time and I'll share every vendor I have.