My First home! I bought this house when i was 23, and the first night i owned it, i sat down in the hallway and cried because I thought I made the biggest mistake of my life. 3/1 ARM, A/C venting from wall outlets, terrible kitchen, etc.

Today, this is one of my best performing properties in Oklahoma and has appreciated in value by $40k.

This property was my first rental. After rehabbing it while I lived there, I decided to rent it instead of loose equity in Jan of 2008

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

Like so many others, It was the beginning of 2008 and I was staring at 2 options: Become a landlord, or sell and loose some equity. I took the red pill and dove into "wonderland" because I wanted to see how deep the rabbit hole went. ;)

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

I was 23, this was my first home. I knew I wanted 3 bed, 2 bath, 2car garage, but I had to settle on a 3/1/1 because thats all that $60k would get me at the time. A property flipper back in 2003 had bought it for 20k, did minimal rehab, and flipped it to me for about a 35k profit. I'm still jealous, but he sparked my first curiosity into owning property.

How did you finance this deal?

I got sucked into the 3/1 ARM from back in the day. My Mortgage lender (a friends family member) SCREWED me when she forgot to lock the rate... the called me up with a "sweet deal" at a lower rate (4.5%), asking for more money down. I was pissed. My brother warned me it was probably an ARM. Sure enough, it was - and she had conveniently forgotten to tell me that, telling me it could only "go up to 6%." When I pressed the subject, she admitted it could go up an additional 6% on top of the 4.5

How did you add value to the deal?

I rehabbed it while living there! What a nightmare. I learned a lot. scraped the popcorn ceilings, installed a new kitchen, built my own double vanity into the bathroom, and put a re-used top on it (thanks GoodWill!), painted everything, tiled the bath and kitchen, raised the ceiling in the hallway and moved the A/C to its own ductwork, installed new doors, trim, carpet. Re-sheetrocked the entire kitchen ceiling! Since then I've installed new HVAC.

What was the outcome?

Still a solid rental. Its gone as high as 975, but come down to 925 now. Tornadoes in the area caused an increase in new home production, as well as new apartments going in nearby...

Lessons learned? Challenges?

Don't remodel while living in a house. Don't trust friends family as lenders. Research everything. Basically, this one taught me all the first lessons. I never even knew books were written on the topic of landlording, or rehabbing.