My first house and intro to real estate investing

[Dakota Beyer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $79,000
Cash invested: $15,000

This was my first house and my intro into RE investing, I purchased this home from a friend's grandpa then did a rehab and started to house hack cash flowing $244 per month while living there. I ended up moving out and the turned over to a family that is renting $350-400 under market value. The tenants are fantastic always pay on time and keep up on the property. I ended up paying the mortgage down to $50,000 before having to refinance to recover from a business venture. $95k in equity still

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

My parents sold the house we were living in prior to purchasing a new one, I was staying at my grandparents and my friend I was working with at the time had said that his family was worried about selling his grandpas old house. I asked my dad to come look at the house with me. We both recognized it was a steal so I purchased it.

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

My friend brought the property up we made a fair offer that would close in 30 days and they accepted.

How did you finance this deal?

FHA loan since I was 19 and did not have much credit built up. I was working as a laborer for bridge construction so my income was good with 0 debt.

How did you add value to the deal?

Replaced floors, trim and painted.

What was the outcome?

I was making money to live in my house while making weekly net paychecks of $1000+ at 19 years old. I decided that I wanted to pay my house off, my minimum payment was $650/month while collecting $900/month. I decided to charge my self rent at $300/month and moving forward my minimum payment was $1200 often I would make $2000-$2500 payments.

Lessons learned? Challenges?

My biggest lesson I learned was when I moved out of state to start a co-working business I left my "friends" in place, they did not take care of the property and it started going downhill quickly (no cleaning, parties and one of them even was selling drugs out of the house) Kicked them all out and rented to a family and it has been smooth sailing since. friends and business don't mix well.

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

Not in this deal