Investment Info:
Single-family residence buy & hold investment.
Purchase price: $320,000
Cash invested: $80,000
I bought a single family home in Prescott Valley, AZ. The home is a 1675 sq ft three bedroom two bathroom with an attatched garage and office as my first investment at 3.5% interest on a 30 year fixed mortgage and I'm currently house hacking by renting two of the three bedrooms which pays for the mortgage and some utilities. I've almost doubled my equity in one year from 80,000 to 150,000.
What made you interested in investing in this type of deal?
I knew the money I had invested the stock market would be better served invested in real estate given the fact I was able to get a 3.5% interest rate. It was an easy first investment.
How did you find this deal and how did you negotiate it?
I found this deal with an agent I found online. I just saw that it was in disrepair and valued $30k less than similar properties in good condition. Once I realized it only needed to be cleaned up (paint, new flooring, etc.), I offered them $5k less than asking and my offer was accepted.
How did you finance this deal?
I put $80k down that I had invested in the stock market over my life.
How did you add value to the deal?
I renovated the interior by myself and with some help from my room mates. We painted the interior and fixed all the drywall, layed new laminate flooring, baseboards and appliances. Still under renovation in the kitchen and exterior needs paint.
What was the outcome?
While renovating the property I've been able to pay the mortgage entirely from rental income and also a portion of utilities each month. I've nearly doubled my equity and only paid the down payment.
Lessons learned? Challenges?
I'm just learning as I go so I've learned a lot about finding good deals for my next investment. The main challenge is going to be getting financing for my next deal.
