First Single Family Home turned Rental Property

[Darren Jordan]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $165,000
Cash invested: $12,000

A property my brothers and I purchased while we were in college. We did live in the property while we attended college. Once we graduated we quickly began renting it out. It is just a few blocks from the University of Texas at San Antonio campus.

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

At the time we were very uneducated in the world of real estate but knew if we needed a place to live together we'd rather pour our money into a house that someday we'd hopefully get a return on.

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

Local realtor, home was new construction.

How did you finance this deal?

FHA

What was the outcome?

Currently still own the property and is being rented out. We currently break even on the property every month. With the house now appraised around $220k and a significant portion of the loan paid down we are thinking about refinancing the property to a 30 year note to actually create an opportunity to cash flow and take the extra cash from refinancing and put it into one or two more rental properties.

Lessons learned? Challenges?

When we originally purchased the property it was a 30 year FHA loan with close to 6% interest rate! About 4 years ago we refinanced (Should've refinanced years earlier) to a 15 year loan thinking it was a great idea. The rate did drop by 2 whole points but we still break even on the property every month. Looking back I think we should've refinanced the property at a 30 year note and we could've cash flowed around $300 per month.