My first rental - primary residence into 3 year lease! Pro's&Cons

[Sara Smalls]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $135,000

My first rental property.This was my primary residence my husband and I purchased in 2015, it was a zero money down loan. When I moved in May of this year (2018) I got it rented out with a great tenant and 3 year lease. I used this as a chance to get experience opening an LLC, using a quick claim deed, and having a business account/EIN. I have learned a lot since then and I could have made way more monthly cash flow but all in all I am making a profit and I learned a lot in the process.

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

I wanted to get into real estate investing and I was about to move for work anyways this seemed like a smart first step.

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

I got most of my information from Clayton and Natali Morris's youtube channel "Morris invests". I also learned a lot about opening a LLC from the Aiden Kramer attorney at law youtube channel, she is specific to CO but her information still saved me a lot of time even though i was not in CO.

How did you finance this deal?

It was a no money down owner occupant loan and three years later i was moving out- so technically there was no real financing involved.

How did you add value to the deal?

Before moving out to reach a wider group of potential renters I updated the master bath and I added a privacy fence for pets. Total of 5k, 3 for the fence and 2 for the bathroom which was entirely gutted and redone floor to ceiling.

What was the outcome?

Got a 3 year lease with an amazing tenant who actually hosts me and my husband as guests whenever we are in town she pays all utilities and keeps the house cleaner than we did when we lived there!

Lessons learned? Challenges?

lesson learned is that even if I knew who I wanted to rent to (found the tenant super fast) I should have done more research on current rent in the area, I could have made easily another 200-300 dollars per month in cash flow. So in this case the 3 year lease definitely bit me in the @$$ but, it also gave me the confidence to keep moving forward in this business and get my first place rented!

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

I worked with a real estate attorney in the Omaha Nebraska area, Jason Hubbard and I highly recommend him and his paralegal Lucy they are fantastic they worked on my lease and created my LLC - actually both of them now.
Also, with my bathroom reno, I worked with "The Tile Guys" locally owned in Omaha Nebraska - they were amazing - fast and extremely well priced they knocked all other quotes out of the water! I was super pleased and would recommend them to anyone in the Omaha or surrounding area!