Investment Info:
Single-family residence buy & hold investment in Chattanooga.
Purchase price: $85,000
Cash invested: $5,000
This was my first home! After living in it for several years, I decided to rent the property instead of selling it when I moved for work. I have been blessed by having the same tenant in the property since 2015!
What made you interested in investing in this type of deal?
For me at the time, it was a no brainer! I was relocating for work and moving into an apartment actually. I didn't have a direct need for the cash I would have made from selling the house, and we had a friend of the family looking to move into a nicer home. With me relocating to Colorado for work, it seemed like a headache to try and sell the home from that far away, and a non-headache to rent it!
How did you find this deal and how did you negotiate it?
So, I grew up in this home. When I was 18, my daughter was born (yes, I was a young father). So in 2007 my Mom was looking to move into a larger home and offered to sell this home to me for what was owed on it. Interestingly enough, she bought the home for $69k back in the late 90s but did a few cash-out refinances along the way. Even still, it was a great opportunity for my family to move out of the apartment we were in, and into a home for the same monthly payment.
How did you finance this deal?
Conventional loan with an equity gift of 20% to avoid PMI.
How did you add value to the deal?
Between me living in the house for several years, and then I did a light remodel before moving the tenant in, this house received several upgrades! Nothing major and pretty much all cosmetic. Removed paneling, removed carpet, refinished hardwood floors, tiled the kitchen, new countertops, new lighting fixtures, and new paint. It sounds like a lot spelling it all out like so, but this all happened over the course of several years.
What was the outcome?
So far so good! I'm here today with a cash-flowing investment, a great tenant, and I've been able to retain ownership of my childhood home!
Lessons learned? Challenges?
I learned almost everything about homeownership from this home. It had its highs and lows along the way for sure. I bought this property as an 18-year-old kid with a wife, a daughter, and a son on the way. I had an entry-level job with no college education. I was tapping into every family resource I had to help with home improvement projects along the way and I think the major lesson I learned is that real estate ownership and investing is a constant state of creative problem solving!
