Primary residence turned investment property

[Art Martinez]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $263,000
Cash invested: $10,000

3 Bedroom, 2.5 bath villa style home. Originally purchased as my primary residence, using my VA loan. The backyard has a built-in gas firepit and seating area. Huge loft upstairs.

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

I was in the market for a single family home

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

My realtor identified this neighborhood. It was a new build and I thought it would be out of my price range. There wasn't much to negotiate, on my end at least. We did negotiate the construction supervisor on-site to install home theater speakers I purchased from BestBuy.

How did you finance this deal?

I used my VA loan. I wish there were more lessons learned from it, but VA loans can be very simple for the buyer.

How did you add value to the deal?

I put a few thousands dollars into the small backyard. By adding a seating area around a travertine fireplace, I gave the illusion of the dining room being extended to the outdoors area as well. Put in some Astroturf and river rock to make the small space more inviting and cozy

What was the outcome?

After I moved from Arizona, I rented it out. I had to take my first tenants to court for being four months late on rent, but since having a property manager, we've been able to find new tenants, that have been there for 4.5 years. It is cash flowing nicely, and its equity continues to grow.

Lessons learned? Challenges?

1. I won't rent to friends again. They took advantage of that "relationship" and we are no longer associates.
2. I will use a property manager for out-of-state properties
3. I am not afraid to fire my property manager for not being candid with me and their fees. That lead to tenants reaching out to me wondering why rent was $150 higher than quoted.
4. I've established boundaries with tenants. They can always call if the PM isn't available, but they must go thru the PM first and foremost.

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

I like my property management company. I do have a realtor I trust, although we have never closed a deal together, she has protected me from bad deals and we walked away.