Primary home turned rental

[Kevin Tye]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $173,000
Cash invested: $39,000

Home was purchased as a primary residence and then converted to a rental when I moved.

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

It was not intentionally an investment but a house to live in. I moved and decided to keep the property and use tenets to gain more equity in the house.

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

I found this deal through a local real estate agent.

How did you finance this deal?

VA loan

How did you add value to the deal?

Before I moved out I put hard wood floors in.

What was the outcome?

I used the rental income and added $200 dollars of my own money to pay the loan down and increase the equity since I put no money down. It worked well I a have around $70 thousand dollars in equity. I have a negative cash flow due to increase in property taxes.

Lessons learned? Challenges?

Even though I have equity in the house I am now at a negative cash flow due to property tax increase. In my area property taxes have increased but rents have not. My current tenants lease ends August 2019 and I plan to try and rent the property for $1, 450 dollars which would give me a positive cash flow of $56 dollars. I would like to hold on to the property for one more year then sell it and use the profit on a down payment using a VA back loan for a multi-family house in Michigan.