My First Investment In 2013

[Jesse Glatz]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $90,000
Cash invested: $20,000

SFR purchased in 2013. 3 bed, 2 bath, 2 car detached garage, 1,250 sq. ft. Cosmetic fixer/updater. Purchased for $90,000 using a 30 yr conv. loan for 5.5% APR with 20% down to avoid PMI and paid my share of closing costs. Home has an ARV now in our market for approx $150k. Monthly rent is $1,500 and current tenant has been there for 5 years. Monthly mortgage which includes taxes, insurance and wind/hail policy which is required on a loan in a coastal county is $943/mo.

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

Cheap investment, area was poised for growth and is continuing to grow.

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

MLS, the agent that I used to buy my primary residence was the agent selling the home.

How did you finance this deal?

30 Year, Conventional, 5.5% APR through local Credit Union. Back then whatever interest rate you qualified for, the credit union added 1% for it being an investment and not your primary residence. I have yet to refinance as I changed careers in mid 2018 to an independent contractor and have to wait for the 2 full years of tax returns to qualify.

How did you add value to the deal?

Cosmetic fixes, minor updating like fixtures, paint, flooring, overhead garage door and opener, fully fenced back and side yards.

What was the outcome?

It has been steadily rented since the first tenant. First tenant gave 30 day notice upon lease expiration and new tenant was found quickly, no down time except a week to clean and prep. Second tenant also gave notice but had another family member lined up to rent and those tenants have been there 5 years and have no plans to move and have expressed interest in buying the home when I do sell. Well....sell as in 1031 exchange!

Lessons learned? Challenges?

Great first investment. Low initial investment, low sales price, good area, high resale value as a 3/2/2 in our area, easily maintainable.

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

TDECU is the credit union I use to finance all my deals so far. As in any credit union, low rates, plenty of options, utilize loan, insurance, online banking, etc all in one place.