My cashflowing, retail-priced home

[Houston Shelton]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $177,000
Cash invested: $45,000

My first home, a house hack. Due to low interest and splitting the rent up by room I am able to generate extra income on the property compared to renting it out to as a SFR to a single family.

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

I was looking for a place of my own and wanted a spot where other people could subsidize my cost of living. Initially I spent about $75/month on the mortgage after renting out the other rooms. Over two years of living there, I got this to where I was living there with none of my own cash going into the mortgage (though definitely went into repairs!). It also has a 2400 sq ft. barn and acre of land, so room to make it into much more.

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

I found this home was on the market for 6 months. Owner had been stiff about pricing and no one picked it up. They pulled it off the market late in the year, so I had my agent reach out to them and negotiated it down from $200K.

How did you finance this deal?

Conventional loan at 3.75%, I put about 15% down so had $50/month in PMI until I payed it down below the 20% mark just recently. I also used cash to redo the roof last year.

How did you add value to the deal?

I redid the guest bathroom, updated light fixtures throughout the house, repainted the whole interior, updated appliances, built furniture, added a garden space and a variety of fruiting plants, and so much more I can't even remember.

What was the outcome?

Right now I have moved out and the house is cashflowing around $270-$300 per month. Given the amount I invested, this number may not be the best out there, but I am so glad to have an appreciating asset that yields more money for me each year and provides a happy home for all who reside there.

Lessons learned? Challenges?

The only reason this house works is because I have an incredibly low interest rate and I put as much cash into the deal as I did. A retail priced property like this might have been a good start for me because it put my head in the game, but it would take a very long time for me to amass enough money to do this again the same way. In the future I will find properties that cashflow similarly at a lower price point, using the BRRRR method to create exponential equity to put into the next deal.