Newbie Home Run at Mammoth Mountain

[Shelby Pracht]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $147,500
Cash invested: $13,000
Sale price: $269,000

We bought this condo with a Fannie Mae loan to put down 7%. We lived in it while making upgrades and renovating, and then began to rent out a shared space in the living room on Airbnb. We were so shocked with how popular the rental was, we were paying our entire mortgage each month! We saved enough to buy a duplex, moved into one half of it, and began renting the whole condo out nightly on Airbnb. We had average gross income of around 3500/mo for a one bedroom condo, and were cash-flowing around $2000/month! As we saw prices rise significantly, we decided to sell and cash out the equity we had earned in the unit, even though we were cash-flowing so well. We were able to cash out more than $130,000 on the sale, TEN TIMES the amount that we had originally put in!!! (and tax free because it had been our primary residence for two years!) This was our very first deal, and we were so lucky to knock it out of the park. So much of this luck and being in the right place at the right time, but we were so excited to have done so well.

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

We were young and wanted to stop paying rent, this foreclosure was our ticket out of the rat race.

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

Our amazing agent, Dennis Cox, told us this foreclosure would be coming to the market soon, and that he thought it was perfect for it. The day it finally listed, we had an offer on it within 4 hours.

How did you finance this deal?

A Fannie Mae Homepath loan, which allowed us to put only 7% down

How did you add value to the deal?

Renovating the bathroom and kitchen, and then eventually renting the property nightly