Investment Info:
Single-family residence buy & hold investment.
Purchase price: $170,000
We turned a gift from a family member into our first real estate investment.
What made you interested in investing in this type of deal?
As we went through the process of purchasing the home, we realized we had the opportunity to turn it into a buy and hold rental.
How did you find this deal and how did you negotiate it?
This was all just luck of the draw here, but it sparked the interest in doing more in the sector of real estate investing.
How did you finance this deal?
We went for a traditional bank loan and used the equity we had immediately in the property to finance our second home, which we currently live in, but are turning into a rental property.
How did you add value to the deal?
The home was mostly turn-key. We freshened up the interior with new paint, and a few new trim items, but mostly it was well landscaped and well cared for prior to our assuming the loan on it.
What was the outcome?
We managed to rent it for above the price of the mortgage, so it is cash flowing. We placed a great tenant in there who has been there since we took over 2.5 years ago. It is a solid property in a solid neighborhood that is continuing to expand and increase in value.
Lessons learned? Challenges?
I would have done things a little differently in terms of purchasing our second property, knowing what I know now. I would have looked more deeply into house hacking or creative financing and left the mortgage for the first property where it was. It was very low and would have done more for our cash flow to keep it lower.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Lender was good, but I also have little experience with lenders, so none that I would fully endorse at this time.
