From Primary Residence to Short | Mid-term Rental

[Elton Tate]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $240,000
Cash invested: $25,000

The home is located in a B to C neighborhood. The home is located near decent schools but not top-of-the-line. The home is also next to a major road in Michigan that leads to local malls, major businesses, restaurants, and other popular cities around the area.

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

We originally purchased this home to downsize from our previous home. We considered the area, and I was sold based on the availability of things to do. Also, the local libraries are amazing.

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

We found the home through a realtor. We did a poor job negotiating the deal. We could have definitely bought the home cheaper. But unfortunately, we were dealing with home-buying fatigue. At the time, Sterling Heights homes were being bought 50k over the asking price. It was a good indicator that we found a good area.

How did you finance this deal?

30 year fixed mortgage

How did you add value to the deal?

Before moving into the property, I updated all of the fixtures that was outdated: ceiling fans, painted walls, light switch covers, outlet covers, added carpet to the basement, and updated the HVAC.

What was the outcome?

As of today, our home has been either rented short-term or mid-term for the majority of the time. I would say we have a vacancy rate of over 90%, which is unexpected for me. It gets cold in Michigan!

Lessons learned? Challenges?

Owning the property reinforced the concept of having a good team. We had a few issues that occurred, and I had to scramble to find the right person to help at the moment. It's even more challenging since we live out of state. Luckily, we have family nearby, so it's not as bad as it could be.

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

At the moment, I would say no. I'm hoping that will change this year. We do have a good friend that's helping us, but we have not secured a deal through him as of yet.