First buy and hold property turns into very good rental

[Steve And Donna Stickel]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $164,000
Cash invested: $40,000
Sale price: $249,900

This was my first house I purchase as residence with the intent to eventually sell for profit. After quite some years in the house, market crash and a few other life events, my wife and I renovated the floors, kitchen, garage and basement (adding a full livable space + full bathroom). We listed it in 2017 for sale and rent, which ended up renting for two full years to an amazing tenant (company). After their contract was up, we sold in 2019 and walked away very happy with the deal.

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

First property purchased in a good area for real estate investing

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

Worked with a realtor, looked at at least 30 other properties. Felt this was a good deal for the first home. Worked with realtor to find fair market value.

How did you finance this deal?

30 year mortgage

How did you add value to the deal?

Over the time living at the property we renovated the garage walls and added a sub panel, finished the basement adding a full bathroom, painted the cabinets, added more hardwood flooring to the house (kitchen and 2nd floor), replaced the appliances and fresh paint everywhere.

What was the outcome?

A great first time home for new families. We enjoyed living in this property for many years and made many memories there.

Lessons learned? Challenges?

The great 2014 flood that hit our property among thousands of others in the south eastern Michigan area and our insurance didn't cover it. We ended up clearing and cleaning out the basement which led us to having it renovated by a contractor. Working with the contractor had some challenges and we almost didn't end up finishing the project with them because of it. Always get everything in writing and stay on top of scope creep (amend the contracts).

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

Realtor to purchase the property originally and contracts for some of the renovations. My wife was a realtor at the time when we rented it and then sold it.