Updated over 5 years ago on .
This is my fail story. Learned the hard way what not to do.
Investment Info:
Single-family residence buy & hold investment in Citrus Heights.
Purchase price: $160,000
Cash invested: $40,000
Sale price: $230,000
This house was foreclosed on me. Long story real short: built a 700sf addition connected to the back of this house, added a kitchen and bath. Lived in that and rented out the main house for $200 cashflow. Took out HELOC and bought a house in Smyrna, TN. Wired a crook from Craigslist money to install carpet, Had Sheriff evict his *** 6 months later after not receiving anything. Then the property manager sent me a bill for $4500, this was in 2007. Was never able to recover. Have sat on the sidelines ever since, and now I'm ready to jump back in.
What made you interested in investing in this type of deal?
My home town was twice as expensive so I moved 4 hours away to buy a house I could afford
How did you find this deal and how did you negotiate it?
MLS. Paid full asking price in 2003
How did you finance this deal?
Conventional 30 year fixed, then added a interest only ARM HELOC
How did you add value to the deal?
Built on a 700sf studio with full kitchen and bath, seperate from main house
What was the outcome?
Figured I would invest out of state and lost both houses
Lessons learned? Challenges?
Never wire a kook off craigslist $2k because he tells you he has some nice carpet in storage he will give you a great deal on because his wife will not move in with the carpet that is there now.
Invest closer to home if this is your second deal ever.
dont use a HELOC to fund your second investment
Get a good mentor that can guide you, not screw you over.
It takes 10 years of your life to get ready to get back in the game..
Please dont do what I did, lol.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
No