From Homeowner to Landlord: Lessons from My First Rental Property

[Katelyn Graber]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $470,000
Cash invested: $25,000

I bought a single-family home in Lacey, Washington, and lived in it while fixing it up. Once the renovations were complete, I was able to rent the property out and have the rent cover most of the mortgage. A big part of that process was learning how to market the home, attract interest, and carefully screen for quality tenants who would take care of the property. This experience not only built equity and created cash flow, but it also gave me firsthand knowledge about the costs of renovations—when it’s smart to save money and when it’s worth investing in better materials. Managing the project from start to finish taught me valuable skills I can use on future properties, while the rental income sets me up for long-term stability and growth.

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

My husband and I originally were going to live in this home for a long time It was a fixer so we needed to do a lot of the renovations ourselves and on a tight budget. After a couple years we decided to move to another state so we thought, let's give landlording a try! I am a big follower of bigger pockets so I did a bunch of research and was able to find great tenants and rent out the home to cover our mortgage.

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

I found this deal on Zillow and used a realtor to negotiate 15k in interest rate buy down, so instead of a 7% rate we are in the 5's. The house had been sitting for awhile and was a fixer so it gave us leverage to ask for a seller buy down.

How did you finance this deal?

FHA loan with 3.5% down

How did you add value to the deal?

We did a lot of cosmetic fixes such as new paint and updated fixtures. We splurged on the main bathroom by adding a large soaking tub, large custom shower niche, and high end fixtures. Most of the renovations were done by ourselves and we learned so much through the process.

What was the outcome?

We were able to quickly find quality renters that pay most of the mortgage. We will soon have a cost flowing rental and continue to have a great asset.

Lessons learned? Challenges?

Live in flips are not for the faint of heart. It is much harder to renovate something if you are living there and it takes over your whole life.

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

Yes, Asay realty was amazing to work with. They negotiate the 15k in seller concessions which is almost unheard of in the greater Seattle area since we have such limited inventory. Highly recommend!