The first rental property

[Mike Jacobson]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $53,000
Cash invested: $2,000
Sale price: $153,000

Bought a 5 bedroom home in 1984. The house was split up and being used as a duplex, $53,000, $2000 down. CD for 20 years. On my days off from working at the Fire Department, I spent extra money finishing the basement off for a 3rd apartment. I moved in as soon as I had a bathroom (built in the old cistern) and concrete on the dirt floor basement. I spent 6 years with my spare money repairing and replacing every part of the house. I moved from apartment to apartment and relocated renters as I fixed each one up.
I sold the house in 2008 and moved the money into my Hotel.

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

I knew that it was the best way to create ongoing income. I was 23 years old.

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

A friend at work brought me the deal.

How did you finance this deal?

Scrambled to get $2000 into my account after writing it. Contract for Deed.

How did you add value to the deal?

Remodeled the entire property. Learned a lot about construction that has served me my entire life.

What was the outcome?

Paid off the home in 2002. Gave me enough equity to purchase the family Cabin with cash by refinancing in 2003.

Lessons learned? Challenges?

I learned so many things about construction, renter expectations, etc. I wish I had bigger pockets learning back then!