Starter home turned rental property
Investment Info:
Single-family residence buy & hold investment.
Purchase price: $133,000
Cash invested: $20,000
A newbie investor here! At age 24, my husband and I purchased this 1960's 3br/1 ba 1042 sq ft.-ranch starter home in Jan 2008. The plan was to live in the house for 5 years and buy another home, but life happened, and we lived in the home for 11 years. We bought a new home for the family in Oct 2019 and kept our starter home with the plan to turn into a rental property. This property will be the first house in our 'Stack!' We are currently looking for our next deal...
What made you interested in investing in this type of deal?
This was the cheapest house on the block that needed minor repairs. List price $135k; purchased for $133k. The home appraisal came back at $150k.
How did you find this deal and how did you negotiate it?
We found the property via our agent at the time. House was on the market for a while, so we negotiated for the seller to pay the closing costs. I believe all in all our total out of pocket costs to purchase this home was less than $4000
How did you finance this deal?
We purchased the home with an FHA 30 yr loan with 3.5% down.
Lessons learned? Challenges?
Challenge was that this house was our first property, and we didn't know much about home improvements, so we delayed a lot of projects. We eventually found help with some of our projects. We also learned how to DIY through YouTube videos. We are currently renovating the only bathroom in the home. The cash invested was over our 11 years in the house.