Tiny house. Before they were cool.

[Andrew Cornstubble]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $10,000
Cash invested: $1

The house next door to my personal residence became available. It's a small but clean 1 bedroom and the price was right. It's on the right. It's the only pic I currently have.

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

It had an insulated cement floored office building i had planned to turn into a guest room at the time. It had a 2 car driveway attatched to our property. The living rooms are 12 feet from each other. I figured it would be best to pick my neighbors if they were that close.

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

I mentioned to the lady I purchased my personal residence from that I wanted it. I told her to call me if she ever descided to sell. 2 years later she called. I didn't really negotiate. We both knew it was a pretty good deal and already have a good relationship.

How did you finance this deal?

It appraised at 6k and ahe sold it to us for 10k for $0 down and $250mo for 5 years. We put about $5,000 into rehab doing most of the work myself.

How did you add value to the deal?

New kitchen floor, new toilet, mostly new plumbing, new shower, paint, carpet, vinyl.

What was the outcome?

I learned not to rent to friends if you can help it. Although i do have a good friend in there now. He's always been a descent guy and his dad is also a good friend. I've yet to hear loud music or see more than 2 cars over there. And if a sink drips they'll send me a text so i can fix it before it becomes a real problem. We make our last mortgage payment next month. We'll likely sell or refi for more capital soon

Lessons learned? Challenges?

I learned NEVER let a house sit over winter. I'm in southeast Kansas and it was a mild winter. Still had 6 leaks. 8 if you count the blown out shower water manifold and the toilet busting and running for 4 days. My challenge was finding someone that would pay on time and not destroy the place. I definitely learned not to let a so called handyman do ANY repairs while living there after he hit the natural gasoline with a sawzall and moved...

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

No. The lady I purchased my private residence from and I worked it out. She informs me of anything she has for sale and I help her keep weekend rentals full. I would definitely recommend her to others.