First Primary turned into a Rental

[Nick Bolding]

Investment Info:

Single-family residence buy & hold investment in Memphis.

Purchase price: $155,000
Cash invested: $35,000

Purchased this as a Primary Residence first. Took out a HELOC to secure another Primary, moved out of this home and Refi'd the HELOC into a mortgage. Usually it cashflows around $400/month; however, recently I connected with insurance agencies that will pay a Premium to do a short term lease for homeowners that have been temporarily displaced. That yields more turn over, but a much higher cashflow per month amount, in addition to property being better cared for by the renter.

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

Started out in property management and knew that I need to buy another house, get out of mine, rent it out, and then repeat the process from there.

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

We were living long distance, we negotiated the deal as a primary because they were asking $170k for it originally but there were some structural issues that we had to handle.

How did you finance this deal?

Conventional.

How did you add value to the deal?

Cut a tree down, had to re-brick one side of the house other than that nothing. It was a done deal when I bought it. Move in ready.

What was the outcome?

Secured a HELOC, moved out of the house, purchased another property, rented this one out. Repeat.

Lessons learned? Challenges?

Be there for the inspection. The inspection found issues that were wrong; however, after we moved in we realized that we needed additional electrical repairs that should've clearly been caught by inspector, but it was "an over-site" on somebody's end. My realtor told me I didn't need to worry about coming to the inspection if I didn't want to. Bad advice, especially for first time home buyers.

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

No, I went into it blindly out first buying from out of state as we were moving. My agent at the time that helped me was actually terrible, but overall the deal was well worth it as 5 years later that home is now worth $270k.