I bought this house with 500$. After a year and a half I moved out and converted into a rental property. I obtained very low interest rates because it was bought as a primary residence. This property I obtained when the interest rates were low for borrowing and before a market increase. It has turned into a great cash flowing property that has increased much in equity from when I bought it.

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

I just obtained the access to a VA loan and wanted to start paying a mortgage and not rent at the age of 25. I just obtained the adequate credit score to get financed and pulled the trigger. I saw that the interest rates were some of the lowest they have ever been and thought it would be a good investment. When I bought and if I moved, I planned to rent the property out to positively cashflow. I did just that when I moved!

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

This was the ninth house I looked at. The property did not look very good from the pictures so I was not that interested. It was sitting on the market for 60 days so it had little interest, I knew I could negotiate. When I saw the house it was far better than the other properties in my price range, it just had poor quality pictures and was crowded with junk. I saw the potential. I negotiated the seller to pay my closing costs even though it was a sellers market and knocked the price down 2,500$.

How did you finance this deal?

I financed a 30 year VA loan with 0 money down besides the earnest money. I obtained a 4.85% interest rate. I financed 9 months later into a 2.25 % fixed interest rate. This cost me 4000 to refinance and lowered my monthly mortgage payments by 300$! I almost made my money back in one year.

How did you add value to the deal?

I have added LVP flooring, done painting to the outside of my house, upgraded the bathroom vanities and light fixtures, and added quality ceiling fans. I have not done an appraisal yet as I am not yet ready to refinance but I am sure the property has increased further then the known value. These upgrades have allowed me to increase rent by 150$.

What was the outcome?

In three years the equity has increased 88,000$ and is cash flowing 500 dollars a month from this property. Even with only 500$ down there is now significant equity to allow refinancing much quicker.

Lessons learned? Challenges?

This property got me to begin to see the power of real estate. It also allowed me to see clearly how to buy and hold real estate effectively. I learned to rely on my team even though I am along way away from my property. I did hours of research on effective property managers to find the one I wanted. I then used another property manager quote and the fact that they would be my manager for at least 4 years to negotiate down to an 8% management fee with only one property.

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

Charleston Property Company (1064 Gardner Rd Ste 214, Charleston, SC 29407) is my property manager and they have done a great job at educating me and managing my property effectively to where I have very little effort required at all! If you are in the Charleston area I recommend them!