First Rental Property!

[Peter Buccowich]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $229,000
Cash invested: $26,000

This is a 3 bed 2 bath home in east Fort Worth that I'm house hacking right now. It's both my first home and my first investment. The home was purchased from a flipper who fixed up most of the house and made this 1963 home look modern and attractive, especially to younger renters.

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

3/2 SFHs in Dallas Fort Worth are plentiful and finding comps for price and rent was easy. Initially, I wanted to look at Duplexes and Triplexes but realized that I didn't have the capital necessary to house hack that if I wanted to purchase when I did

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

Found on the MLS, and as an old home, it did very poorly on the inspection. Most of the issues were not concerns for me but we were still able to negotiate down the price based on the content we saw in the report.

How did you finance this deal?

Traditional financing, 5% down

How did you add value to the deal?

Some of the things the seller did in the flip added value, but a lot of the updates were fast and had poor workmanship. I was looking for a low-maintenance first property so many small updates were needed. Unfortunately for me, the ways I'm adding value don't have a huge ROI. Those include adding new windows and potentially some additional foundation repair.

What was the outcome?

Last week I was able to grab two tenants to fill the rooms! I was able to get more than I would normally had I rented the entire unit out. My entire mortgage, insurance, PMI, and Taxes are paid for each month by their rent. There's still some work to be done but so far everything is turning out okay!

Lessons learned? Challenges?

I was in a position where I needed to buy quickly which is not a great position to buy in. I'm not sure I want to work with a flipper in the future since the quality of work was so poor and they only performed the minimum work. I was left with needing to buy new windows and potential lingering foundation issues.

Secondly, I did not shop around for lenders and I need to do that in the future.

Either way, great learning opportunity!