Bought at 2007 Market Peak, finally above water

[J Clayton Durham]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Lacey.

Purchase price: $240,000
Cash invested: $50,000

Shared housing

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

Able to become homeowner again after financially devastating divorce

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

Found via classifieds.

How did you finance this deal?

Used hard money lender for down payment. Zero down, cash back at closing

What was the outcome?

RE values tanked. Wound up 60K underwater 2 years later, with hard money loan due in 5 years and first mortgage pick-a-payment loan set to turn into a pumpkin in 5 years. Managed to buy 2nd house in 2009 with QDRO funds from a 2nd divorce. 2nd house awesome investment and good financing. Bad first house deal eventually inflated to above water again. Rents were breaking even whole time as I kept occupancy near 100% by finding good tenants. Now rents are providing positive cash flow.

Lessons learned? Challenges?

Real estate doesn't always go up. "buy now before you get priced out" was a big lie in 2006-2007.
hard money lender worked with me to renegotiate 2nd mortgage loan rather than me default while still underwater. Allowed me to keep the property.