Our REAL first rental (by accident)

[David Stone]

Investment Info:

Single-family residence buy & hold investment in Shelton.

Purchase price: $155,000
Cash invested: $2,000
Sale price: $231,500

We purchased this home after moving back from Denver, Colorado in 2010. It was meant to be our primary home, but after living in it for nearly 3 years we got tired of the $1200 a month payment (and nearly $1000 a month in car payments/full coverage insurance). We took a risk and moved into an apartment while attempting to rent out this home. (Meanwhile we bought a duplex) Check out my blog for more info on this investment!

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

It was an affordable SFH at the time (although it lost 20k the first year we owed it!!!) We still turned around and made over $75k years later :)

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

MLS foreclosure. It was listed for $170k and we offered $155k. The bank accepted immediately (and took $150k on the similar neighboring foreclosure property). Probably could have gotten a better deal :)

How did you finance this deal?

FHA financing at 3.5% down with a co-signer... yes this was the second primary home we bought.

How did you add value to the deal?

We waited for the market to rescue us. We rented it out for $100 less than our mortgage payment for a couple years but ended up making money off the sale. Not an actual investment but our first experience in dealing with tenants.

What was the outcome?

Check out our blog on this property for more info. We rented it for less than our mortgage payment, tried doing our own showings, caved in to property management and realized we could do a better job. It was a s**t show at first but taught us valuable lessons that shaped our NOW successful career in real estate :)

Lessons learned? Challenges?

TONS!!! Check out my blog for details!

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

We used the realtor who listed the property... yes, we were NEW :)