Tiny one bedroom in Wyoming

[Christina Linn]

Investment Info:

Single-family residence other investment.

Purchase price: $26,000

This was our first house; we bought it a couple months before we got married and then decided to move to another state for my husband to go to school. The house was an amazing deal and I was only 20 when we bought it, so I thought we were doing great.

We still own and rent the house with no plans to sell it. It's a tiny 680sf house that was built in 1921.

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

I thought it was super cool to own my own house at such a young age - and we did it without a co-signer!

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

My mother-in-law actually bought the house for my husband when we first started dating and wouldn't let us pay for anything. I got super tired of that and told my husband if we were going to continue to live there we would have to buy it. We bought it for what she bought it for.

How did you finance this deal?

We got a HELOC that was interest only for 2 years and amortized for 15 years with no balloon.

How did you add value to the deal?

We put about $40,000 into this house (way more than it should have cost) with brand new high-end cabinets, new solid hardwood floor, carpeting throughout the rest of the home, and a new bathroom. We tore out a wall to make the tiny kitchen bigger and add a dining room. We tore out another wall to fit a regular tub instead of a ball and claw foot tub.

What was the outcome?

After being unable to sell the house (we moved out of state) for over a year we went against all advice and rented it out through our real estate agent. She rented it for $450 after about 6 months and we took a loss for a year before I took over management. I rented the house in a few days for $650 and had a little bit of cash flow every month.

Lessons learned? Challenges?

There were so many lessons and challenges! We were young newlyweds and my husband was going to school while I worked two jobs to support us. We had no money! Everything that happened that cost us even $10 was scary - no, I'm not exaggerating!

I learned to carefully choose a contractor and to watch the work as it's completed. I also learned to never, ever pay for work before it is completed (we supplied everything).