Buy a House/Condo When it Costs More to Rent

[Will Gaskill]

Investment Info:

Single-family residence buy & hold investment in Hayden.

Purchase price: $318,500
Cash invested: $10,000
Sale price: $355,000

Renting in Steamboat was more expensive than a mortgage. We decided to start building equity rather than pay over 2k a month to rent. We started looking outside of town and bought this property as our 1st home. It was move in ready and needed no work.

We lived in this home until I got a job offer and we moved back to Birmingham, AL. While in the home we added a wood burning fire place, poured a concrete patio, freshened up the landscape, and did a few other odds and ends. This was the perfect scenario of not know how well we would do.

Lessons learned:
1. Don't rush to sell. 2020 was an interesting ride and we tried to get out of the house for fear of the market tanking. We could have done more research and held it longer.
2. We tried to sell FSBO. Timing was not great, but who could have known. We listed the week COVID was declared a pandemic....
3. Pick a Real Estate agent that understands and accepts our goals and risk tolerance

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

Built in 2005, this was a move in ready 3 bed / 2 bath, ranch style home with a 2 car garage, fenced in back yard, large deck, and great front yard. Builder grade and perfect for a starter home, family, or retirement. The Master suite was on one side of the house separated by an open floor plan with the kitchen, living, dinning, eat in breakfast nook, and laundry off the garage. It was located in a safe neighborhood walking distance from down town, 3 parks, and school.

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

We found it via Realtor.com/App and used a real estate agent with inspectors to negotiate.

One thing to note: we used the same agent to sell that we did to buy. I would better vet the agent selling by home and make sire they understand my priorities and risk tolerance. I need more of an aggressive agent to balance my cautious number running / pragmatism.

How did you finance this deal?

3% down using a 1st time home buyers loan from a local bank.

How did you add value to the deal?

We added a wood burning fire stove (we got for free), poured a concrete patio off the back porch, freshened up the landscape, re-seeded the yard, and did a few other odds and ends with finishes.

It really didn't NEED anything though...

What was the outcome?

We were able to sell and make some $. Not much, but it was great to come out positive. We learned A LOT, and gained confidence to pursue our next deal in Birmingham, Alabama.

Lessons learned? Challenges?

1. Timing is everything: We listed the house FSBO the week COVID was announced.... not the best thing for rural Colorado home sales... We had great momentum going into the sale and it tanked with the COVID news
2. Don't get emotional: After stalling trying to sell the home we felt trapped and that we had to dump the house. This was a narrow mindset and we lost our leverage (an thousands of $) and settled for the 1 offer we had. We could have done more research and held on longer. We had options

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

- Doug Labor: Steamboat Sotheby's (great and super knowledgeable buyers agent)
- Land Title