Exited our First Real Estate Deal

[Maggie Medal]

Investment Info:

Single-family residence buy & hold investment in Nederland.

(2015) Purchase price: $380,000

Cash invested: $15,000

(2018) Sale price: $570,000

Purchased as primary home, knowing area was experiencing good appreciation. Pushed hard and scraped to get into this FSA loan. Single income, credit less than 600. Turned into a house hack after the first year when we stated learning about assets/liabilities. Put a wall up and rented downstairs short term on Airbnb. Made decision to sell based on market appreciation and meeting minimum requirements for capital gains exclusion.

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

We we tired of paying rent and knew we would be buying a property. This Seller was motivated, property had been on and off the market for several years. We understood the market in Nederland and the potential for substantial short term appreciation.

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

Found via MLS, listed at $430k negotiated through an agent. My Initial offer was low at $357k and seller did not respond to my offer, but seller dropped price to $417k the next day. Brought a 2nd offer at $390k w/$10k seller concession and was accepted. Appraisal came in at $411k

How did you finance this deal?

FHA loan with $15k down

How did you add value to the deal?

Brought a deal the seller was willing to take!

What was the outcome?

Walked with substantial profit to be used for continued investment in residential rental real estate properties and possibly some private lending.

Lessons learned? Challenges?

This property was in gorgeous condition, move in ready and immaculately maintained. But is was still in DISTRESS in a way, because the seller could not get it sold over the course of 2.5 years, really just due to general market conditions. The city of Boulder was pricing many buyers out of market, and knew that this market - a 20min commute to Boulder - would continue to strengthen as higher income Boulder buyers continued to drive demand here.

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

My friend is a real estate agent, and I negotiated a deal with him to take a flat rate of $5k to be my seller's agent. In exchange, I did all the work for the listing (photos, listing narrative, etc). Saved $12k in real estate fees!