First Investment Property

[Nakota Crow]

Investment Info:

Single-family residence buy & hold investment in Westminster.

Purchase price: $347,000
Cash invested: $35,000

Purchased using the BRRR strategy. When first purchased I started with adding 2 extra bedrooms. Within 2 months I had all 4 extra bedrooms finished and rented while living in the 5th. Since then I have been slowly renovating other parts of the house. I have had zero vacancy because I rent by the bedroom on a month to month lease and advertise on Facebook marketplace. The monthly cash flow factors in what my room would rent for if I did not live in it.

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

The opportunity to add sweat equity in a home that I was comfortable living in. I enjoy fixing and building, but also maintaining a steady cash flow while not paying for a place to live. I knew this house would pay for itself once I maximized it's potential.

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

Countless house shopping with my realtor. I had to fire the first as he did not understand what my needs were, and just felt like a used car salesmen. I negotiated concessions with the seller based on some of the HVAC wear, and she was ready to sell as a previous buyer had fallen through.

How did you finance this deal?

3.5% down with a 5.375% interest rate but no PMI, later refinanced to 2.875% interest rate and now have 15% equity based on recent appraisal, though I think it would sell for more.

How did you add value to the deal?

My lender wrote a letter to the seller explaining I was a first time home buyer who wanted to fix up the house and take care of it.

What was the outcome?

The seller had built the house with her late husband in 1971, and was excited about me continuing to take care of it. I made an offer the day after it went on the market and she cancelled other showings.

Lessons learned? Challenges?

I may have been able to get it for a little less, and I should have shopped for a better loan. But I knew that even with high mortgage payments the rental income would cover it until I could refinance and generate more cash flow.

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

My realtor, Douglas Groskopf. He is an incredible resource and always willing to help, and will actually listen to what your needs are.