First house and first rental property

[Chris A.]

Investment Info:

Single-family residence buy & hold investment in Bremerton.

Purchase price: $240,280
Cash invested: $500
Sale price: $255,000

4 bed, 3 bath house 1,482 sqft.
I bought this while stationed in Washington state and looked into selling but even after 3 years there was not enough equity without having to bring a lot of $$$ to the table to close. I then became a landlord and rented the house out. Initially it was negative cash flow, just under $100, I was able to refinance in 2014 to have about $150 in positive cash flow for the remaining years until selling. Overall a great experience and great property.

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

This was before I became serious about real estate, I just wanted to have my own house because it was a good 'investment', but I didn't truly become an investor until moving out in 2012 due to being stationed in California.

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

It was on the MLS, I used a retired military agent by the name of Ken LeMay. Negotiating was pretty easy

How did you finance this deal?

VA home loan 0% down

How did you add value to the deal?

while living there in 2011, I remodeled the bathrooms adding new vanity/sink, lights in the two downstairs units. Added wainscoting in the guest bath, and partially finished the garage, with custom built shelves. In 2017 I added fresh paint throughout the inside prior to selling.

What was the outcome?

Even though I wasn't the most savvy about the purchase and planning it as a rental from the beginning, I was lucky to be able to rent it out and have an ok property management team. I had a good tenant and there was some damage that needed to be repaired prior to selling, it was not much of a setback. I ended up getting positive cash flow from 2014 until selling it, and after all costs i got back about $15K.

Lessons learned? Challenges?

I would have taken a closer look at property management and considered self managing if possible. Always plan your purchases as a rental because you never know what the market will do. I started using a tax professional who asks the right questions to optimize deductions and plan for future years, well worth the $$.
I now regret selling this house but that was before listening to the BP podcasts and really reading up on ALL of the long term benefits of real estate, live and learn.

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

Ken LeMay was my real estate agent for the purchase and the sale. He did a good job on both sides of the deal.