First House Hack transformed to rental

[Cameron Rockwell]

Investment Info:

Townhouse buy & hold investment in Virginia Beach.

Purchase price: $155,000
Cash invested: $1,100

Just moved out of this house as a primary residence. House is 3 bedroom 2 and a half bath with 1428 square feet. I rent out all three bedrooms separately and manage myself. With PITI, Maint, Capex, and vacancy I cash flow $445 a month. Budgeting for management still puts me at $245 a month in cash flow.

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

Listening to the BP podcast and using test ads to find the strength of the rent by room market in this military community.

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

I found this deal through the MLS using a non investor savvy agent. We made 37 Letter of intent offers before acquiring this property.

How did you finance this deal?

I was able to use my VA loan and put 0% down. I got 3.5% of closing costs from the seller and ended up paying $1100 to close on my first home.

How did you add value to the deal?

I owned the property for a year and did cosmetic repairs such as new paint updated appliances and renovating bathrooms. We added an estimated 10k in sweat equity based on local comparative market analysis.

What was the outcome?

Outcome was owning my first property with a little over 20k in assessed equity. I was able to put down 1100 and about 5000 in repairs earning a 90% return on investment my second year owning the home. I was also able to cover 110% of my living expenses in my first year while I was renting out the master bedroom.

Lessons learned? Challenges?

Picking Tenants is one of the most important skills to become a landlord. I also found that giving the tenants options for rent terms made them feel like they had a larger part in the decision. Annual lease $650, Semi Annual Lease $675, Month to Month $700

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

Bigger Pockets professionals and contributors played a huge role in my success as a landlord and on this deal. Using my VA loan through Veterans United as well as my agent working with me to get this deal was critical to the execution of my investing.