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Updated over 1 year ago on .
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First SFH Rental - 6 Months In
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $240,000
Cash invested: $30,000
My first investment property. I bought it 5% down with a traditional 30yr mortgage. I lived in it as a primary residence for 18 months while I remodeled and "rent proofed" the property. After the remodel was done I transferred ownership to my LLC and then moved out and got it rented. It's been a great experience so far and I look forward to adding more properties to my portfolio!
What made you interested in investing in this type of deal?
I had been researching real estate investing since I was in college and this made the most sense for my first investment right out of college. I was able to only pay 5% down and get better leverage by living in the home while I remodeled and built sweat equity. I would have preferred a duplex, but in 2021 with rates below 3% I had a hard time finding a duplex I could afford as there was a lot of competition.
How did you find this deal and how did you negotiate it?
I found it using a real estate agent.
How did you finance this deal?
5% down and 30yr mortgage from the bank.
How did you add value to the deal?
New exterior paint, minimal care landscaping, new flooring throughout, new trim/doors, new vanity/mirrors in bathrooms, updated appliances.
What was the outcome?
I put about $30k into the deal including my down payment. The property has appreciated about $40k and I now have my first tenants in the home.
Lessons learned? Challenges?
I think the biggest thing that helped me was building out my "system" for analyzing properties. I made an Excel sheet that I can quickly run numbers to determine if a deal makes sense. I also built out a pretty extensive system for managing properties so it will be easier to scale in the future. I'd also say its really important to do good tenant screening. I turned a lot of people away until I found the right tenants.
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