Lemp House - St. Louis

[Ben Carron]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $134,000
Cash invested: $35,000

Purchased with a down-payment assistance program offered at the time as a primary residence. Rented the other 3 rooms out to pay the mortgage. Will be selling in November for about $200,000.

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

I needed a house after college and realized I could live with friends while they paid me rent to pay down the mortgage. I also liked the area of St. Louis for its proximity to downtown and popular bars and restaurants.

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

Found the deal on Zillow. Property was in foreclosure. Bank was asking $169K. I offered $150K and negotiated down to $134K after inspections. I had a great mentor who was a real estate agent help me through the entire process.

How did you finance this deal?

Money saved from living at my parents house for a year after college plus down payment assistance program offered at the time.

How did you add value to the deal?

Added a driveway (was street parking), added a fence, redid the landscaping, added a shower in the master bathroom.

What was the outcome?

I was able to at least have the rent cover my mortgage each year. I will be selling the property to my brother for $200K in November so he can live in and rent it.

Lessons learned? Challenges?

As the first house I bought, I learned so much about inspections and issues in a 110+ year old house. I also learned how difficult it can be as a live in landlord who was renting to friends and decided to do month-to-month leases instead of annual. It was challenging to find people to replace friends that left without much notice.

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

Not in this deal, but I recommend Kevin Davis (agent) and Jason Jacobs (lender) who I used to by my next house in St. Louis.