Personal home turned into investment

[Lance Law]

Investment Info:

Single-family residence buy & hold investment in Petal.

Purchase price: $134,000
Cash invested: $1,000
Sale price: $145,000

Bought this home as a personal home with USDA rural developement loan for $0 (actually left closing with $5000 in my pocket). We lived in it for 2 years until we found a foreclosure that we could "house-hack." We kept this property and rented it for four years and a total of $1500 in maintenance during that time. We sold it and walked away with a check for $22k after taxes and commissions.

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

Actually started as a simple personal home purchase.

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

Purchased on the MLS

How did you finance this deal?

USDA rural development 30 year mortgage loan

How did you add value to the deal?

By holding the property for 4 years instead of selling it when we found another home we were able let our tenants create equity for us.

What was the outcome?

The property cashflowed $300/month due to the fact that we carried a 30yr mortgage and the rental market in our area is strong due to the highly ranked school district and low crime rates.

Lessons learned? Challenges?

Finding a good Tenant. We were lucky enough to find a tenant who was a contractor from Texas working on a large apartment complex here in our area. His company paid the rent and he was generous enough to fix every issue that came up as well as all of the general maintenance which saved us a lot of overhead cost and padded our bottom line.

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

Not on this deal.