Primary residence turned cash flow rental

[Jayleigh O'Leary]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $143,000
Cash invested: $170,000

Our very first home purchase! We bought in 2009 during the housing crash because Obama offered the $9 cash incentive. We got that and 4 months later my husband got laid off. We rented the house out for dirt cheap and moved to North Dakota to find work in the oil boom. Unbeknownst to us the renter trashed the house. 4 years later we moved back to Tucson and evicted her. We put about 12k into it and our own sweat equity and flipped it. We now use a management company and have great tenants.

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

Honestly it was our first home and we weren't thinking investment at all. When my husband lost his job we were intending to move back into that home. When we moved back it was too far from his new job and we had 2 kids and one on the way so we needed something bigger and closer. Converting it into a rental just made sense!

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

It was a new build so there wasn't much negotiating.

How did you finance this deal?

VA loan

How did you add value to the deal?

Mostly just time. They added a school close by, a fire station and a general store so once the housing market came back it became a wonderful investment.

What was the outcome?

Perfect for families that work in corrections or on the airbase that's close by.

Lessons learned? Challenges?

We will probably always use a rental management company from here on out. When we rented it to a friend of a friend we really lost a lot by not vetting her. She trashed it and it cost a lot in time and money to get it back up and going.

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

not for this one