First home purchase turned rental

[Jonathon White]

Investment Info:

Other buy & hold investment.

Purchase price: $210,000
Cash invested: $25,000

Purchased as our first home, in '16 at 210k. 1900 sq ft. townhome single unit - built in '84 - tri level.

We lived there for the first 2 years while updating flooring, appliances, paint, water heater etc.

Turned into rental in 2018. $1700/month

Cash flow is non-existent - still paying additional on principle which is biting into cash flow, as well as HOA & management.

Has not been refinanced to date.

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

This specific deal was a personal home purchase turned rental after 24 months of living in the unit. First home purchased.

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

In-laws had to sell a property to get cash out for another deal, purchased from them.

How did you finance this deal?

Minimal down payment with conventional 30 year - still in this product.

How did you add value to the deal?

We invested sweat equity in updating nearly everything internally, updated basement, laid new laminate, created a dining area, new carpet, paint, bathroom updates, etc.

What was the outcome?

We bought a single family in 2017 and moved out, finished some updates, turned rental in 2018 - occupied by same tenants since, rent is $1700/month however cash flow is not there due to HOA, management, we're still paying additional on the principle each month and we've not refi'd yet so we're still in the original loan product.

Lessons learned? Challenges?

Most lessons learned were basic first home owner lessons, most oriented in home improvement, basic real estate familiarity & knowledge however...
Biggest thing learned here for me was take the deal you can get to get your foot in the door. You've got to start somewhere! We had given up on buying, we were ready to rent another year and this fell in our lap. Was not pretty or what we were hoping - took a lot of work and love but we got a start when we thought it would be another year.