This is a 3br/2bth attached row house I bought in 2014 for $187,000. Since then, the neighborhood where it's located in Richmond VA has really increased in value significantly.

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

I saw the potential of a growing neighborhood that had a huge influx of young people and viable renters. I decided to try and extract some of the equity in January 2021. I did some work on updating the bathrooms, paint and refinished the floors. Then had it appraised for $325,000 and took out about $95,000 in a cash-out refi and did the typical 75% loan to 25% equity left in the deal, and moved it from a 5/20yr commercial loan paying 4.95% into a 30yr conventional loan paying 3.5% - so my total

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

Originally in 2014, I was living right next door and I knew that the original contractor (also owner) wasn't able to get what he wanted. It was being rented out (since 2007) and was not listed for sale at the time. I sent the owner a blind offer email, saying I wanted to buy it as-is with no inspection or appraisal and without a relator. That's how I was able to purchase it for a discount.

How did you finance this deal?

I did not qualify for a 30 yr conventional loan at the time because of my DTI. So i had to seek out a 5/20yr commercial loan with a rate of 4.95% at a loan of $140,000 It was not ideal but it allowed me to secure the house at the time. Every 5 years i had to refi with the same lender but they always gave me the option to take cash out, which I did.

How did you add value to the deal?

I did not add any value for the first 7 years other that just renting it out and managing it myself to save money. Sometimes I added value sine i lived next door i was able to capitalize on that fact and get a discount on doing two HVACs at the same time or building a fence. Sometimes this was fine, other times it was a total nightmare situation and I was fixing toilets and taking orders from renters. The value I added only came later in 2021 when I did some larger cosmetic renovations.

What was the outcome?

Still going strong because the area is now a highly sought after and desirable place to live among young professionals.

Lessons learned? Challenges?

I learned that I absolutely HATE landholding and managing tenants. I've learned that no matter what, the landlord/tenant relationship will never be amicable. Each side will always feel like they are getting taken for a ride and people want what they want. I have some good tenants in there now that are fine and are able to fix easy things themselves, but the day they move out I am hiring a PM to manage.