How I fell into being a Landlord

[Jayma Morgan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $383,000
Cash invested: $76,600

3 bed 2 bath SFH with pool on 2.5 acres.

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

Honestly we fell into it, the market tanked, we had to move for work out of state, and I didn't want to loose the money we had invested, but it wasn't worth what we paid for it, so I told my husband we would rent it out. Now, 15 years later, not only does it cash flow nicely, it also has appreciated really well too!

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

Originally it was to be our home, so on my lunch break I would peruse Zillow. I was 7 months pregnant, we didn't negotiate too much. However, Florida had not yet been hit by the great recession, and the house was originally offered at 389K, but when the owner got the appraisal back it was higher by 43K. We were still in negotiations and they wanted to raise their price. We said either honor the terms agreed to, or we will walk. Then the whole world changed a few months later!

How did you finance this deal?

We put 10% down, 80% IO 30 year fixed, and 10% IO 30 year fixed with Countrywide!

How did you add value to the deal?

We put in high end finishes, and murals.

What was the outcome?

Refinanced when rates were low, no longer have any initial cash invested, and used cash out to purchase another property.

Lessons learned? Challenges?

The buy and hold method works. If you can get a long-term fixed interest only loan, it can help you get into that first property that you might not have considered.