Interested in Learning to Make Smart Investment Moves

[Stacey Jordan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $575,000
Cash invested: $140,000

I live in the house that I bought it as a long-term investment. I'm deciding if I should house hack it. It has about $170,000 in equity today.

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

This is only my 2nd house that I own (owner-occupied RE). I bought my 1st house (owner-occupied RE) in 1992. I raised my kids as a single mother, quit my W2 job as a trial consultant, and was a FT real estate broker associate. Sales aren't my strength -- so it was feast/famine for about 10 years. Even though I was cash challenged I held onto my house (putting past due payments on the backend) and had equity to sell, pay off debts, and get my credit in check. I bought the house I'm in now.

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

The house was Active for 80 days and it checked the box of my #1 must have: it was in the neighborhood I wanted. I didn't do a good job negotiating even though it was on the market for 80 days. I wanted the house and got emotionally attached ... to the neighborhood because I knew the prices starting to go up in this neighborhood quickly.

How did you finance this deal?

20% down - FHA - because I barely made the FICO threshold.

How did you add value to the deal?

I saved on buyer-side closing costs by representing myself.

What was the outcome?

Purchase price in 2018 was $574K. Estimated value today is ~$850K. I could have made smarter moves but my mistakes are (overall) still in the black.

Lessons learned? Challenges?

Main lessons learned: 1. Keep my debt/income ratio down! I've made hasty decisions based on my debt ratio challenges. I'm paying it all off in the next couple months and need to keep reminding myself to keep it in check. 2. Make and keep a spreadsheet to track the money --- upgrades should be well thought out and always add value. Challenges: Striving to not make the same mistakes that I listed on my main lessons learned!