Finally Purchased My First Property

[Scott Vaeth]

Investment Info:

Single-family residence buy & hold investment.

This house is 1627 sq-ft. and has 3 bedrooms / 2 bathrooms. It's in a reputable school district and sits on a .5 acre which is a lot for the neighborhood. The property is also less than 10 mins from downtown and major hospitals.

My plan is to live in it for 1-2 years while house hacking one of the bedrooms. The goal is to eventually rent out the entire house, pull equity out of the first house, and repeat the process.

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

I've explored various avenues of real estate investing, yet I've consistently found myself drawn to the BRRRR strategy and house hacking. Although my initial plan involved investing in multi-family properties, I saw alternative paths and exit strategies in case of unforeseen challenges with this opportunity. I'd like to grow my portfolio with multi-family properties down the road.

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

I looked for properties that had been on the market for longer than 30 days. Not only was this property on the market for 60 days at the time I found it, but it needed a lot of work.

How did you finance this deal?

I utilized a HomeStyle Renovation Loan, a conventional loan that enabled me to finance the cost of the rehab. I made a 5% down payment on the house, and another 5% down payment was allocated towards the rehab expenses.

How did you add value to the deal?

The inside of the house was a complete rehab that had been updated to code. Luckily for me, I didn't need to tap into the contingency reserves that were set aside. Here was a breakdown of the work done:
- Updated the kitchen
- Updated (2) bathrooms
- Took down / opened up walls to create an open floor concept
- Added LVP flooring throughout
- Added new paint and trim
- Currently negotiating prices to update the roof

What was the outcome?

Before I started the renovations, I got the contractor's estimate checked by an appraiser to show my lender it was a good investment. Turns out, the appraiser said it would pay off. I ended up with around $20K extra in equity, which might not sound like a lot, but I saw this as a way to hedge against unexpected expenses years down the road. Within 2 months, the contractor had completed all the work, and brought it up to code. I have the title of occupancy and can move in faster than anticipated.

Lessons learned? Challenges?

There were many challenges throughout this way of doing things but I learned a ton very quickly. Building a team of like-minded, investor friendly people is an invaluable asset to have. Building that trust allowed me to make certain decisions quicker, which helped expedite the process. Doing your due diligence and collecting research every step of the way is also crucial.

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

I have an amazing investor friendly agent that I would happily recommend to anyone in the Greenville / Pickens / Anderson area. Shoot me a message and I can send that info over.