Our house... is in the middle of our street ... literally :)

[Andrew Thomas]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $96,000
Cash invested: $2,880

Personal residence, for now. In 2022, planning to convert to LTR when we become empty-nesters, b/c wifey wants to wait until then to move for a new owner-occupy investment. Until then, looking for BRRRR deals in our area, and long-distance BRRRR deals. We are VERY new to the idea of REI, and are saving up funds, and learning as much as possible.

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

My cardboard box hovels kept leaking, the van down by the river got washed away in a flood, and I got evicted from under the railroad bridge. After I checked out of the Roach Motel, I decided to buy a house. :)

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

We rented it about 5 years. Over time, we figured out she and her husband were the owner / landlord / PM.

Decided to purchase from the landlord. The PM was also the REA, and the spouse of the owner. I knew zero about real estate (and had zero interest in REI, due to some bad experiences in the past.)

I feel they gave us a fair deal. They didn't charge us standard commission, as she was the "buyer's agent", and her husband was the seller. Also sold below market.

How did you finance this deal?

Conventional loan, 3% down, owner-occupy, 30 year fixed mortgage. 

How did you add value to the deal?

They bought it as a foreclosure or short sale, not sure. We rented about 5 years, and paid down their mortgage, then decided to buy. Tried to treat the house "like our's", even while renting... fixed minor issues ourselves, didn't ask for repair credits, paid on time, etc. Tried to make it easy to be our PM / landlord.

What was the outcome?

We have PR at below market price, and future rental house. The previous owner / REA pulled MLS comps last month, and estimates it is worth about $155k. We bought for $96k about 2.5 years ago, owe $88k. Based on that, we have $65k-ish equity. Plan to have her be our PM / REA for local deals.

Lessons learned? Challenges?

Find good REI mentors. Build an experienced, trustworthy REI team. Don't over-improve your personal residence if you plan to use as future rental... Almost built shop and lean-to add-ons. Build credit - I followed Dave Ramsey for years, which is great if you have zero financial training, but made it hard to get a mortgage for my personal residence, and would be nearly impossible for REI / BRRRR investing.

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

NW GA REA and PM - Molly Schultz

Training -
Kevin Paffrath / MeetKevin - Podcast #357 - his upbeat, earnest personality got me interested in RE, and his REI course helped me gain a foundation for basic REI concepts, which in turn, lead me here to BiggerPockets

BP, of course - "all y'all", as we say down South  :)

@Brandon Turner - Podcast #(fill in the blank... he's done a bunch) - the man, the myth, the legendary beard
@David Greene - Podcast #327 - the BRRRR-ista Extraordinaire