I paid for my graduate degree with the equity of this investment

[Amanda Che]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $335,000
Cash invested: $70,000

I bought a pre-foreclosure property in the Bay Area suburb in early 2012. My mortgage was very manageable since my DTI was less than 20%, but the trade-off was commuting to San Francisco for work. Living in that home with low mortgage allowed me to not only save money but also build equity.

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

I was interested in this property as I foresaw it having high appreciation potential for several reasons --

1. The property was dated and I was able to add equity with minimal rehab
2. It is in a secure residential community with HOA management
3. The seller was motivated at the time due to its financial situation

How did you finance this deal?

Conventional loan

What was the outcome?

When I decided to move to New York for graduate school in 2015, I pulled some of my equity to pay for my tuition and living expenses. I am also netting positive cash flow by renting it out to family members.