First Investment Property (not a homerun but a base hit)

[Jonah Kolsrud]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $241,000
Cash invested: $15,000

There were no reasonable duplexes or triplexes on the market so we made our own. This home had a small mother in law suite attached to the side of it (1bed, 1 bath) but was separated by a sliding glass door. Added a kitchenette, cabinets, paint, +closed the wall and our tenant now pays 88% of the mortgage. Based on comps we should be able to cashflow ~$800-1000 per month once both sides of this are rented. Added bonus was that when we purchased the home it appraised at $13,500 over what we paid.

What made you interested in investing in this type of deal?

Wanted a deal which eliminated our housing expense either completely or drastically.

How did you find this deal and how did you negotiate it?

MLS and used a personalized letter which had a picture of my girlfriend, dog, and myself. Once at the table we negotiated a number of items listed on the inspection to be covered by the previous owners as well.

How did you finance this deal?

Traditional financing (primary residence 5% down loan)

How did you add value to the deal?

Created a income stream where one did not exist. Bought an undervalued home in an appreciating area that should be poised for growth. Created a win win for the buyer because they wanted to sell to a young family who wanted their first home and they left negotiation feeling that they won!

What was the outcome?

Home has been our primary residence and we have had 88% of the mortgage covered. We have now been saving our money to do another deal in 2022.

Lessons learned? Challenges?

Refinishing floors was highly time consuming but worth it, most problems in your house that are not structural or major mechanical/electrical issues can be figured out with youtube and elbow grease.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Worked with a agent I found on BP and he was amazing! Lender came from a mentor I connected with on BP.