Converting my first house into a rental

[Chris Shaw]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $335,000
Cash invested: $1,000

The first house that I lived in for over three years. I am in the process of purchasing a new construction (loan and contract secured) and renting this one out.

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

I didn't intend on investing in it. I needed a place to live, and my eyes were opened to the power of equity!

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

My real estate agent ushered me toward it.

How did you finance this deal?

VA home loan with 0 dollars down. I did have to pay for the inspection as well as the lawyer fees. All in all right under 1000.

How did you add value to the deal?

There wasn't an incredible amount of value on the purchase. We got it for 25k under comps, but those were the builders comps. Being that it was my first house, I didn't realize how powerful the time was. 335k at 2.75% interest. My equity quickly shot up.

What was the outcome?

I am shocked at the difference between equity and cash flow. I assumed that because I had equity I would surely cashflow a ton. I currently have around 130k in equity, but only cashflow 200 monthly. I deem this as a success, because I feel that equity is more advantageous to have in my stage of life.

Lessons learned? Challenges?

I learned to invest more time and money into upkeep and upgrades. My house is nowhere near messy, but I was shocked at how much work I needed to put into it to get it rented. If I could go back in time I would have re-upped and purchased another home a year after this one.

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

I worked with Ryan Punches. He is a great investing agent for new construction.