Our second home, which we later rented out

[Amy Kendall]

Investment Info:

Single-family residence buy & hold investment in Pleasant Grove.

Purchase price: $160,000
Cash invested: $8,000

This was our second home that we purchased when we moved back to Utah from school. It was a flip and our real estate agent warned us that we were paying top dollar at the time. We did a few repairs and improved the yard as we lived there for just over 2 years. Then, when I told my husband that I thought I could rent it for $1450, he thought I was crazy! We now rent it for $1595. My husband was so excited that he started looking for a house to move into right away. I only wish we had the knowledge then that we had now, because we could have bought more properties like this at the time. This was one of our best investments as it hits the 1% rule, which is difficult to do in our area.

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

It was a great home for the price and had just been renovated due to a fire.

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

It was on the MLS for one day and went to multiple offers

How did you finance this deal?

We did a conventional 30 year loan

How did you add value to the deal?

We improved and fenced the yard

What was the outcome?

This property has been performing very well. We are debating whether to do a cash out refinance now or do a 1031 exchange within the next few months.

Lessons learned? Challenges?

Had we known at the time, we should have bought as many properties like this as possible. A property like this is nearly impossible to find in our area now. We also made the mistake of moving into a bigger home that we really liked and didn't want to leave. If we had continued to move into homes and then turned them into rentals, we could have had better financing and could have sped up our portfolio growth. Unfortunately, we didn't find BiggerPockets until after we had rented this house.