Second home, first investment, after a hard lesson.

[Erik Sivertsen]

Investment Info:

Single-family residence buy & hold investment in Midvale.

Purchase price: $176,000

We initially moved into this home as our primary. We lived there for 6 years, moved for a job, and kept the property to hold.

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

Honestly, a very hard lesson made us keep this for an investment. We owned a condo in San Diego, CA when I was in the Marine Corps. Being young, and obviously stupid, we considered renting the unit but felt it would be "a pain in the ***" if we did. It probably would have cash flowed $500-$600/month (in 2001). We sold it, made around $19K, and blew the money. We decided we would never sell a property again, unless it made sense.

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

MLS search for our primary home.

How did you finance this deal?

We bought it with a VA loan, no money down.

How did you add value to the deal?

We gutted and remodeled the entire basement, and continue to make upgrades to maximize our rental income in that market and to maximize our equity.

What was the outcome?

We continue to hold the property, make some money through it's cash flow, and plan to do something like a BRRRR (now that I understand what that is and how it can move us forward with our investing).

Lessons learned? Challenges?

Not an essential lesson, but it has made us educate ourselves and consider making an LLC for the property, and others. We have also learned more about our market and how to maximize our rent through upgrades.

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

Not yet, other than the a la carte services we've used for purchasing our primary homes (4 times now).