Falling into Real Estate Investing

[Brandon Beren]

Investment Info:

Single-family residence other investment in Tempe.

Purchase price: $175,000
Cash invested: $35,000
Sale price: $320,000

3bd 2ba, 1075sqft, single family home, renovated into 4bd, 3ba, 2 kitchen home. This was a combination of house hack, buy and hold, then sold. Bought the property on an FHA loan, with dated interior and a single car garage on the back in addition to the regular 2 car garage on the front. Converted the 3rd car garage to a mother-in-law suite and rented it while I lived there. Rented out the entire property in 2019 after moving to England, then sold it in 2020.

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

The 3rd car garage in the rear wasn't livable space and so not included in the sqft of the property. Since it was well within my budget it was a no brainer for me to buy and convert that to livable space, instantly injecting equity.

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

I worked with a local Real Estate agent.

How did you finance this deal?

FHA Loan and cash for rehab.

How did you add value to the deal?

Added about 400sqft buy converting a 3rd car garage to a mother-in-law suite with a full kitchen.

What was the outcome?

I rented the suite for 750/mo while living there, then 1650/mo for about a year, and sold it on for a healthy profit.

Lessons learned? Challenges?

I gained many homeowner skills, being a first time home buyer at the time. I also had a loose contract with a contractor that walked out of a renovation before finishing. I learned how to install a toilet, sink, and backsplash on the plus side. If I could reverse time, I probably would have kept the property which has a cash flow of over $300/mo after the first year, and just pulled equity out of it to make it a BRRRR in the end.

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

Alex Eremija (real Estate Agent when I bought), Martin Piñion (during the sale), Curtis Harkrader (Contractor - not the one who walked out)