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

Built in 2005 this 3 Bed/2 Bath house was 1,640sf. It had a 2 car garage, fenced in backyard, deck, back patio, and an open concept floor plan. The master suite was on the east side of the house separated from the 2 guest rooms and 1 guest bath by the kitchen, living, dinning, eat-in breakfast nook, and laundry off the garage. This home had perfect structure/bones and was located in an amazing neighborhood walking distance from downtown, brewery, 3 parks, and schools.

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

We needed a place to live and renting in Steamboat Springs, CO was too expensive. Instead of paying over 2k a month on rent, we bought a house with a mortgage of $1,880 a month and started building equity with a 30 min. commute (totally worth it). 

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: 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. Emotion: 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