Townhome cash cow & added future investing leverage through HELOC

[Qui Chau]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $73,400
Cash invested: $3,800

In a great location within a NE city we invest in. Everything is walkable from the property. Started out as our first home which we kept as a LT rental. Now FT STR. Drawing above $200/night. Fully paid off and a cash cow as well. Updated home throughout the years and entering it's 8th year as STR.

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

We buy our primary homes with the strategy of it being a future LT hold and its rentability.

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

Found home through our RE agent and she helped us negotiate a great deal. It was a 2nd home for the sellers and we actually had bought it below the value of it being built new at that time.

How did you finance this deal?

FHA with minimal downpayment.

How did you add value to the deal?

Updated the properties throughout the years. It is now "bullet proof" for renting!

What was the outcome?

Great asset as long term hold.

Lessons learned? Challenges?

First property we had bought in HOA. Found out much later that the HOA doesn't have power over what we do with our owner units, only the common area management. That cost us 1 season of STR when they threatened us. Always do your due diligence on the HOA bylaws AND how it was filed in the county court!

Now that it's paid off, we opened a HELOC to leverage that equity for other deals. Money is no good sitting idle!