Our first home turned first rental

[Mattias Clymer]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $144,000
Cash invested: $7,500

This was our first home turned first rental. With a low down payment and being put on a 15 year mortgage, this property has great equity that we leveraged with a equity line.

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

We first and foremost wanted a home to live in! From there, we wanted to keep it because we loved the home and wanted a new rental!

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

This was an on market deal in 2013. We were able to do a low down payment loan with closing cost assistance.

How did you finance this deal?

FHA to start but we converted it to a conventional on a 15 year mortgage with about 3.15% interest.

How did you add value to the deal?

New roof, HVAC, turned a 3 season sun room into full livable sqft.

What was the outcome?

This property balances our portfolio with heavy equity gains. It doesn't currently cashflow as well because we have the same tenants in the home and haven't been able to raise rents to current market rents.

Lessons learned? Challenges?

I love this deal. I suggest every young aspiring investor starts by buying an affordable home that could be a good rental. I think most would disagree with the 15 year strategy but if you can afford it, its not a bad plan to build up some equity. Its like a forced savings account. The mistake we made was not getting an equity line before buying our next home. The current draw back is it doesn't cashflow as well as it could... mostly due to complicated longterm tenants.

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

I worked with an agent and then joined her firm. So I recommend myself hahaha