Investment Info:
Townhouse buy & hold investment.
Purchase price: $350,000
Cash invested: $36,000
This is a townhouse that my wife and I purchased this year. We put down a 10,000 deposit in Sept. 2020, and the townhouse finally finished in April 2022. It appreciated a great deal since our initial deposit, as Idaho (Boise in particular) has grown a ton since then as well. Our townhouse is situated about 2 hours north of Boise in the resort town of McCall, and we love having it as both a getaway as well as a short-term rental property.
What made you interested in investing in this type of deal?
My wife and I live in the greater Seattle area, but we're both from Idaho originally. We have loved going to McCall our whole lives as we're both big into skiing/snowboarding, and in the summer we love to recreate in the outdoors there. After saving up for the past 6 years, we decided it was in our best interest to finally purchase something there and we knew that we could use it as both a vacation home as well as short term rental.
How did you find this deal and how did you negotiate it?
One of our pals from the McCall area is also a real estate agent. She was key in helping us find what we were looking for at a good price. Initially we had wanted something more rustic and stand-alone. But since we don't use it much, it made way more sense to get something brand new and with less hassle! It was one of two remaining townhouses when we found it, so it was a last-second decision we had to make to put down our deposit! We're sure glad we did!
How did you finance this deal?
We got a conventional loan, but it's considered a secondary home so the rates were a little higher
How did you add value to the deal?
We added value by putting our own personal touch on the property. Everything from using a NEST thermostat and keyless entry, to artwork and furniture that represents our style. Beyond that it has been an enjoyable experience being a liaison between our renters and the experiences they have while staying at our home.
What was the outcome?
Our townhouse has appreciated almost twice as much as our initial investment and we now have a property that cashflows nicely and is worth more than when we started. Beyond that, I've gained a much more robust understanding of the real estate business and how it works... which has helped me to understand how much I still don't know!
Lessons learned? Challenges?
We did have one challenge with regards to our real estate contract. In the contract, the real estate company failed to put the address of the property that we were to be purchasing. As time went on, our property was gaining value. As a result, the developer/seller's agent tried to claim that because there wasn't an address in the contract, that we had to either send them an additional $27k for inflation or take our deposit and forfeit our contract. Needless to say we lawyered up and kept it.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, please feel free to inquire if interested!
