Erik's First Property

[Erik Stewart]

Investment Info:

Single-family residence buy & hold investment in Moorhead.

Purchase price: $152,900
Cash invested: $5,351

My first real estate purchase. An FHA loan used to purchase and this was during the time with the $8k tax credit for first time home buyers. This was during college. I lived here for about 7 years through college and after, all while having roommates. Later refinanced to a conventional loan with a 3.5% interest rate for 30 years and used the FHA again to house hack a 4 Plex in West Fargo.

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

I found the house on the MLS when I was in college. I didn't know much about real estate but it set my course to begin in my career of real estate investing. I believe I got closing costs paid for by the seller and got about 5k off the asking price.

How did you finance this deal?

FHA financing was used as I didn't have a lot of money in college. I just wanted to live for free by having roommates during college, which worked out great!

How did you add value to the deal?

Mostly a turn key property, I have done minimal updates through the years but have been diligent on the repairs/cleaning/maintenance.

What was the outcome?

The outcome is an OK cashflowing rental with about 50k in equity. Return on equity on this property is not super great and I am debating either utilizing the equity with a HELOC to help flip houses or sell it and roll profits into a higher producing asset.

Lessons learned? Challenges?

This house was my entire introduction to being a landlord, handyman, accountant, insurance agent, etc. I made tons of mistakes on the road to being the best investor, landlord, and husband I can be :)

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

Not during this deal specifically but I have built a team of fellow investors and industry professionals along the way.