Single-family residence buy & hold investment in Unm.
Purchase price: $153,000
Cash invested: $3,000
Originally going to use my VA loan as an active duty service member, get out after my 6 year term, go to school full time and ride on that housing stipend from the GI Bill. I then met my now wife in that process of getting out and buying this property so it is now an excellent rental near a college campus (near the upper grad Law and med school area).
What made you interested in investing in this type of deal?
Start to my financial freedom in doing the "House hacking" thing where I would own and live in this for a year or more and rent it out. It currently sits as an equity builder for a down payment for a better investment property years from now.
How did you find this deal and how did you negotiate it?
Found a Realtor on Zillow, which I now know is a terrible idea and I just got lucky with a good one. She then showed me a bunch of great properties and I was pretty flexible with living arrangements as long as the location was good. Realtor did all the negotiating. I wouldn't recommend not using a realtor as a buyer's agent (at least out here in NM, seller pays commissions)
How did you finance this deal?
New Mexico State Bond Program. NM MFA as it's called out here, better known across the nation as an HFA program with down payment assistance. My lender couldn't get condo approval due to what I now assume was incompetence or apathy to my situation. Made me get into Loan Originating in the first place. Silver lining was it freed up my entire VA benefit for another property.
How did you add value to the deal?
Negotiated a brand new furnace (refrigerated A/C combo) during transaction. Currently Condo unit is repairing stairs out front and paid for new roof 5 years prior to my purchase, so major maintenance is minimal if at all for the next few years of ownership. Not a lot of value added, but value sustained at least.
What was the outcome?
We were able to move out 2 years later to a bigger home for our family and use my Realtor connections to have a contract lease agreement and advertised on MLS for free as a rental.
Lessons learned? Challenges?
Get a lender who knows the ins and outs of VA loans and more importantly submission to VA. Be as up front as possible with lender, esp. if the type of property changes. At the time, I didn't know if was a big deal if it were a condo, single family, etc. Glad I didn't want a mobile home as I now know as a lender the headache it is to deal with that type of transaction.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, Jessica Beecher with Re/Max in Nob Hill area of Albuquerque. Though she doesn't send me referrals now, I would recommend her for any kind of transaction. Steer clear of Michael Bowen of now Water Stone Mortgage. At the time he worked for First Mortgage when he dealt with my loan. First mortgage is now bankrupt...I'll leave it at that. PM me if you care to know the rumor mill on that one.
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