First Rental Investment

[Andrew Barlow]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $78,000
Cash invested: $25,000

I bought this property as a HUD foreclosure for 78k. I immediately put about 3k into it just to get it rentable and starting renting it for $1,200/mo. After 3 years of renting I put about 22k into a rehab, putting me all in at $103,000. The house currently rents for $1,450/mo, appraises at $144,000, and I am doing a cash-out refi to pull out $108,000.

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

I was thinking about investing, and I saw this house around the corner from my. I made and offer, and that was it.

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

I saw a sign in the front yard. I found out it was a HUD foreclosure. They were asking 85k, I offered 78k, and they accepted.

How did you finance this deal?

I did a cash-out refi on my personal home

How did you add value to the deal?

I did a total rehab.

What was the outcome?

I was able to BRRR it and get $5,000 more than I invested into it and it rents for $1,450/mo.

Lessons learned? Challenges?

I knew absolutely nothing about working with contractors, estimating repairs, or property management. I also learned that I need to stop trying to do the work myself. You never ultimately save money that way.