All Forum Posts by: Andrew Newcomb

Wow nice work!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $380,000
Cash invested: $95,000

In 2020 we Bought a 2 bedroom, 1 bath, outdated home built in the early 80s. My wife and i had been saving money from our day jobs and wanted to invest it in real estate rather than the stock market. At this point we already had two rentals and tangibly felt the ROI from real estate investing. We were very familiar with the rental market and what simple updates could bring a lot of value. So we bought a home near us, spent a couple months updating it and then rented it out.

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

The ROI from investing in real estate just seems to be the best option.

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

Searching on zillow/redfin for many months until we found a home that was in our price range and both my wife and I could see potential for updates.

How did you finance this deal?

We saved up a down payment and got a 30 year conventional mortgage.

How did you add value to the deal?

We took out a wall which dramatically opened up the kitchen to instantly make the home more open and modern. Updated the kitchen with new counters, cabinets, electrical, appliances. And new flooring throughout. Because the home is only 900 sq ft, and we have become very handy, we were able to do all the work ourselves.

What was the outcome?

The updates (and location) allowed us to easily find a renter. It has positive cash flow with a very low interest rate, despite it being a non-owner occupied loan.

Lessons learned? Challenges?

Nicer property is easier to rent

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $380,000
Cash invested: $95,000

In 2020 we Bought a 2 bedroom, 1 bath, outdated home built in the early 80s. My wife and i had been saving money from our day jobs and wanted to invest it in real estate rather than the stock market. At this point we already had two rentals and tangibly felt the ROI from real estate investing. We were very familiar with the rental market and what simple updates could bring a lot of value. So we bought a home near us, spent a couple months updating it and then rented it out.

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

The ROI from investing in real estate just seems to be the best option.

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

Searching on zillow/redfin for many months until we found a home that was in our price range and both my wife and I could see potential for updates.

How did you finance this deal?

We saved up a down payment and got a 30 year conventional mortgage.

How did you add value to the deal?

We took out a wall which dramatically opened up the kitchen to instantly make the home more open and modern. Updated the kitchen with new counters, cabinets, electrical, appliances. And new flooring throughout. Because the home is only 900 sq ft, and we have become very handy, we were able to do all the work ourselves.

What was the outcome?

The updates (and location) allowed us to easily find a renter. It has positive cash flow with a very low interest rate, despite it being a non-owner occupied loan.

Lessons learned? Challenges?

Nicer property is easier to rent

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $280,000
Cash invested: $56,000

When my wife and I moved to a larger home to accommodate our growing family in 2017, we decided not to sell our existing home. So instead of using the sale proceeds from our first home as the down payment for the new home, we got a HELOC on our first home to tap into the equity and use as a down payment.

We then rented out our first home at a monthly amount that covers both the mortgage and the heloc payment on the first home.

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

The pros of keeping the first home outweighed the pros of selling. The numbers were clear that if we could find a way to keep the first home and rent it out, with the rent covering expenses, then in the long run we would be better off.

How did you finance this deal?

We used a HELOC to tap into the equity of our first home and used it as a down payment. The HELOC is an adjustable rate and therefore risk is involved. Of course, 2023 rates are getting high... so we are keeping an eye on the balance of the HELOC and will aggressively try to pay it off if it gets out of hand.

What was the outcome?

The property has cash flowed. But as rents increase in our market the cash flow has stayed roughly the same because the interest rate on the HELOC has also gone up. So the rent has not grown faster than our expenses.

Lessons learned? Challenges?

We posted our home for rent on zillow just to see what we could get for it. The best way to know for sure how much rent you can get is to actually list the home for rent. Once we found out for sure, then we felt comfortable about getting the HELOC and keeping our first home as a rental.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $189,000
Cash invested: $6,000

First investment with an 80/20 loan from Country Wide (remember them). I had terrible credit, barely a job, but I had big dreams in my 20s so they gave me a couple loans. Then the market crashed in 2008. But I was able to remodel and refinance a couple times and eventually to got out of the bad terms on the original loan(s). Currently have a 30 year conventional mortgage at about 3% interest. Moved out in 2012 and fortunately had no problem renting it out over the last 11 years.

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

After college I saw the potential of paying a mortgage instead of rent so made a bold decision. It was rough seas, but worth it in the end to break into the real estate game. I can't appreciate enough the knowledge and lessons i learned from that first deal.

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

It was the only thing in my price range in Portland Or!! I grew up in the area and drove passed the for sale sign. Negotiation was me calling the real estate agent. I didnt even have an agent (wow I was naive... AKA dumb)

How did you finance this deal?

Good old country wide financial gave me a subprime mortgage. It was an 80/20 loan where the 20% down was also a loan at 7% and it was an ARM that adjusted to something outrageous after a couple years.

How did you add value to the deal?

Sweat equity. I became very handy and remodeled most of the home. Took out walls, replaced shower, sinks, updated plumbing and electrical, you name it, I did it. All of this while I lived there and rented out the second bedroom to a buddy.

What was the outcome?

Still own it and rents well. I moved out in 2012 when I got married. At the time the rent barely covered the monthly expenses, but as rents have gone up over time we get more and more rental income.

Lessons learned? Challenges?

I learned (even back in 2012) that shopping for a conventional loan online is way better than choosing a lender based on a referral. You have to do your own research and compare rates. We got way better rates from online lenders than we did from local lenders or big banks or local credit unions.