@Melanie Johnston
Hello Melanie! So nice to meet you!
I am happy to share my story here! 😊
I came from a single family house hold, with one older sister - we have an age gap of 15 years. I was about 10 years old when my Mother became disabled as was no longer able to work a full time job and provide for our family. Without a second income we depended on social programs in order to put food on the table and keep the lights on.
Shortly after becoming disabled she was able to qualify for Section 8 housing. As I was growing up I can’t say that I fully understood how much that impacted our family. Looking back on it, had we not been able to access Section 8 housing, I’m not sure where we’d be housing wise, so for that I am incredibly thankful.
Growing up in Scottsdale Arizona on Section 8 housing came with its own set of challenges even though it was a guaranteed rent check every month. If you are unfamiliar with the Scottsdale area, it is a bit upscale. This makes it challenging to find housing that fits within the subsidies criteria for rent price range. Not to mention many landlords are unfamiliar with Section 8 and tend to set criteria that will automatically disqualify a family from renting their property - ie. proof of income 3X the rent amount, or proof of current job history. Needless to say we had difficulties finding consistent housing opportunities within the city limits.
As I went into middle school we were able to connect with a father of a girl who was in my grade and Girl Scout Troop. He had a home he invested in and was looking to rent long term until his son was out of college and ready to move in. Because of him I was able to continue my path in the same school and graduate with the same class of individuals I had grown up with since 4th grade. He gave us the opportunity to live in a prime neighborhood without rent increases for a little over 7 years. We were very unprepared to move when given notice, but a big thank you to Mark, for being such a gracious, and understanding landlord and inspiring me to do the same.
Post this move I was working on Associates degree at my local Community College and had to couch surf for couple of months between friends until we were able to locate another affordable rental in the area. We rented for another 3 years or so before the owner of our house wanted to sell. It was at this point in 2016 that my sister and I realized we needed to begin our own path of purchasing properties. We set out and got qualified through a lender and for weeks we scoured the neighborhood and MLS with our realtor. The goal was to find something we could afford within the same neighborhood that I grew up in. We must have toured at least 30 to 40 properties, placing offers on homes we thought may work for us before we saw a ‘Coming Soon' sign pop up at a house about 10 homes away from where we were about to move from. It seemed too good to be true, but we took a short walk and knocked on the door to learn more about the property.
The owners had inherited the home from a relative that had passed away. They were building a new home in the East Valley and needed to sell the home so they could use the money from the sale to finish building their new custom home. We told the owners that we were prepared to make an offer right then and there and that they didn't need to proceed with formally listing it. We were able to utilize a FHA loan, in combination with the Home in 5 program that Maricopa county offers, for down payment assistance. Together my sister and I purchased our first home in Scottsdale the summer of 2016, for $222,000. It is a 3bd 1bth SFH. I paid for our inspection and appraisal, along with an earnest deposit of $500. In total I put in $1000 of my own money into the purchase.
For the first 2 years my sister and I shared residency and then beginning this year my sister moved out and we began renting to one of our cousins and a good friend of mine. I am currently living mortgage free and actively preparing to purchase a duplex or triplex property in 2020. We are preparing to refinance our current property so we can remove the PMI from our payments and pull out cash for the next down payment and potential closing costs. Between loan pay down and appreciation we have accumulated 100k in equity in just 3 short years. I am preparing to use the FHA's 203K loan to purchase a property that needs some TLC and upgrades. Ideally I would live in my next purchase for another 1 to 2 years before steadily accumulating additional properties to buy and hold.
I feel extremely grateful for all the opportunities that have been laid in front of me. When I was going through the purchasing process I was extremely naive and ignorant to investing. Fortunately we landed a killer deal and I have spent the past 6 months immersing myself in podcasts and books in order to better educate myself and prepare for my upcoming ventures. I currently work a full time job in the Cannabis industry that pays generously and I plan to continue to leverage my salary throughout this process until I am cash flowing enough to step away from the 9 to 5 life or until I can figure out the art of flipping so I can produce enough income to offset what I would be making from my salary.
Thank you for taking the time to read, and I hope future investors find some inspiration from my story. If anyone has questions, I am happy to elaborate further. I look forward to connecting with you sometime and thank you so much for the cheerful welcome! I hope you have a great rest of the weekend!
