Buying as a Personal Residence to later convert to rental

[Kelsey Brodeur]

Investment Info:

Condo buy & hold investment.

Purchase price: $190,000
Cash invested: $40,000

We're building our investment portfolio by buying homes/condos and using them as personal residences until we finish renovations to increase maximum earning potential, then convert them into income producing rental properties. This will be the first of many to come!

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

We want to generate passive income while enjoying the homes we add to our portfolio.

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

My husband and I are both Realtors so we found this unit and immediately recognized it's potential. We negotiated the contract terms ourselves and beat out 3 other offers by appealing to the sellers sentimental side as she was from the same city in Ohio as my husband!

How did you finance this deal?

We put down 20% and got a conventional loan for the remainder. Alex bought this home under his name using his first time home buyer credit and I plan on purchasing the next home using my first time home buyer credit.

How did you add value to the deal?

We're planning on renovating and updating the unit to use as a rental once we move on to our next home. Doing simple updates like painting and changing out light fixtures and hardware really modernizes and freshens up the space. Our goal is to make it the nicest unit in the building so we can rent it out the peak rate for this building. We want to attract tenants that want to stay a long time to avoid quick tun-over so we're focused on making sure the space is super functional and inviting.

What was the outcome?

We'll find out once renovations are done and it's on the rental market!

Lessons learned? Challenges?

Warranty's are your best friend. Things will almost always go wrong the first few months of homeownership that will be costly! Having a warranty can save you so much headache and stress both physically and financially! Also don't be afraid of HOA's. They are notorious for being difficult but the squeaky wheel gets the grease. Just stay on them and be persistent about what you need.

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

The lender we worked with was a nightmare and we will not be referring them to anyone. Alex and I are agents though and we'd love to help you out with all your Real Estate needs in the Nashville area!