Investment Info:
Single-family residence other investment in West Lafayette.
Purchase price: $100,000
Cash invested: $30,000
Much to my wife's dismay, we bought my childhood home off my parents for an extremely discounted price. It is a 5 bed 3 bath, 3100 sq ft home on nearly 1 acre, 1/4 unfinished basement 3/4 crawl, 2 car attached garage. Home was in great shape just needing some aesthetic updates and remodeling to personalize the home.
What made you interested in investing in this type of deal?
My wife (fiance at the time) and I were tired of making small mortgage payments for apartments and decided that since we would be investing in a lifelong partnership with one another in January last year then we would also be better off investing our money into a true mortgage payment. After seeing other homes in the same area that were half the size and asking double the price I was able to convince my wife that this really was the best opportunity for us at that time and into the future.
How did you find this deal and how did you negotiate it?
The deal more or less fell into our laps and took very little negotiating. My parents were contemplating buying my grandmothers house after she passed and selling their home, which just so happened to be around the same time we started looking at houses. It took more negotiating to get my wife to agree to calling the home I grew up in "our first home" than the deal itself. My parents were gracious enough to sell us the home for their remaining loan amount.
How did you finance this deal?
FHA LOAN
How did you add value to the deal?
Since purchasing with the intent to live in it while we fix it up we have taken our time with the remodel starting with the 3 bedrooms, 2 bathrooms, and family room that we aren't using regularly. Initially, when applying for our HELOC, our home was appraised at $235,000. After only putting in about $15,000-$20,000 into the renovations previously mentioned and having the HELOC re-evaluated, a second appraisal was completed and came back at $285,000. Kitchen, living rm, and master bed/bath left.
What was the outcome?
We are currently still living in and working on the house. and were blessed with our first child last Christmas which slowed down remodeling a bit but has also opened our eyes even more to this amazing opportunity. We look forward to finishing our remodeling projects and seeing what our best option is from there. Would greatly appreciate others advice on whether I should look to sell and purchase multiple different properties or hold and rent (home is a few miles from Purdue University).
Lessons learned? Challenges?
Biggest challenge is trying to keep from getting attached to the property. Beyond the blood, sweat and hours we have spent doing the remodel ourselves, it is also the home I grew up in, our first home, and now the home we had our first child. As you can probably imagine, becoming emotionally attached to this home is super easy. I just have to make sure that I don't let that cloud my vision and investing goals and make the most out of what could be a once in a lifetime opportunity.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Although we didn't go through him for the purchase of my parents home, my good friend and realtor Ryan Parker (now with Keller Williams On The Water - Sarasota FL) was great for us when we were looking at other houses in the area before I was able to convince my wife to go with our home now. We also got our loan through another good friend, Jason Everette (Mortgage Loan Originator with Ruoff Home Mortgage Lafayette, IN). These two are the best in the business and I highly recommend them to all!
