Our first home turned rental

[Micah Watson]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $44,500
Cash invested: $3,000

Purchased as our first home with minor fixing up to do. Converted into rental property in 2018. It rents for $949/mo so it’s a little better than the 2% rule. On the lookout for more deals like this!

Update: Just reappraised for 78k and our tenants just requested to sign on for an additional year. 🔥🔥🎉🎊

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

My bride and I were renting a studio apartment and realized we could own a house for a smaller monthly payment.

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

We found it on the MLS through our real estate agent.

How did you finance this deal?

We used a lesser known loan called a rural development loan. 0% down on a 4% 30 yr mtg.

How did you add value to the deal?

When we moved in, it had belonged to someone’s grandma and it looked it. We lived in it for 4.5 years and did little things gradually to bring it to life: new carpet in a bedroom, new bamboo floor in another bedroom, patio area with a pergola, seal coated the driveway, etc.

What was the outcome?

At this point. We have roughly 40k of Equity and it’s cashflowing about $300/mo after all the expenses present and future.

Lessons learned? Challenges?

We learned the power of a little cosmetic love and, more importantly, buying low in a rising market.