First experience with the power of real estate

[Tyler Henfling]

Investment Info:

Single-family residence other investment.

Purchase price: $99,500
Cash invested: $15,000
Sale price: $152,000

Live-in flip. Primary residence turned investment. I felt this was a slow, steady strategy to learn some basics and begin my real estate journey.

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

After renting for a few years, I grew tired of throwing my money out the window. I wanted to build my own equity instead of growing someone else's.

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

Local realtor found the deal. I offered 10% under market and received an acceptable counter.

How did you finance this deal?

Conventional mortgage. Since it was outside of city limits I was able to utilize a "Rural Development" loan with $0 down. I housed 2-3 roommates for the first 2 years until my day job could supply the means to afford my home/lifestyle.

How did you add value to the deal?

I performed light renovations and along with a strong market, the house realized some considerable appreciation.

What was the outcome?

A net profit of around $40K.

Lessons learned? Challenges?

Live-in flips are great for learning and for escaping capital gains tax. However, it is a slow and rather limited strategy.

[Mindy Jensen]

@Tyler Henfling, you're right, it's a slow way to generate funds, but you've got to live somewhere... Might as well make money off that property while you do.