Buying my second Condo.

[James Toland]

Investment Info:

Condo purchase starting out as a primary residence and moving to a buy and hold (for a few years)

Purchase price: $281,000
Cash invested: $17,000

3 bed 2 bath condo, 1200 sq ft

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

I was moving to Colorado and did not want to rent again. Found a condo in a decent area and decided to buy it.

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

I used Trulia to find my deal. The price started at 250k but I and another potential buyer bid up to 280K. I offered 281k and got accepted!

How did you finance this deal?

I used my VA loan so I only had to put 5% down.

How did you add value to the deal?

I replaced the kitchen countertops and sink, repainted every room, replaced handle fixtures in the kitchens and bathrooms, etc. A little bit of sweat equity can go a long way toward making a place look good!

What was the outcome?

I found another deal 7 months into moving in and decided to pursue it as my new primary residence. I posted my place on Facebook marketplace for rent and was surprised at how many people wanted to rent it out. I think I priced rent a bit low but I'm still coming out with 200$ cashflow to put towards any repairs and a rainy day fund specifically for the property.

Lessons learned? Challenges?

I learned never to buy a property with HOA again. My first condo and this one both have HOA and it's just money down the drain for those who hold the mortgage. I believe condos are a great stepping stone for new property investors because of the lower price point but now that I have seen what HOA can do to cash flow I will be staying away from them in the future and looking for single-family or multi-family without HOA. Hopefully, during the next few years, I can continue to upgrade the property to increase its value and then perform a 1031 into a better cash-flowing rental.