This is the story of my first house. My, “disaster of a purchase” Part 2
CEO, redT Homes
Read on to discover why buying a home is not too difficult
From Part 1 –
“What have I done?”
“I hate this neighborhood.”
“What kind of mistake did I just make?”
“I can hear my neighbors through the walls.”
“Wait until my parents see what I did with their money.”
“What the hell are my neighbors doing?!.”
These were the thoughts running through my head keeping me awake in sweat that night. I was learning firsthand what buyer’s remorse was and it didn’t feel good.
Now I’ll share with you the second part of my story.
This is what happened a year and a day after making what I initially believed to be the worst decision of my life.
Immediately after having made the purchase I got to work.
I spent the next several months completely renovating and updating the house – including new paint, refinished cabinetry, and replaced tiling in all bathrooms. I wish I could say I did this all by myself, but that would be a lie. I was no Chip Gaines, and I wasn’t the most handy of men. Fortunately, I had friends, family, and various resources available that I could call on for help.
This was the start of my education of what it takes to remodel a home and how to add monetary value to house. As a result, I was able to turn my 800 SqFt dump-shithole-shack-eyesore townhome into an 800 SqFt townhome.
My real estate agent, Larry, had added me to his mailing list and somewhere around 9 months after closing I received a post card from him that showcased sales in my neighborhood specifically.
Side note – I know no one really likes to receive ads like this, but sometimes the information can be really valuable. If it weren’t for that postcard I wouldn’t have known what selling opportunities were available to me. redT Homes offers a free no obligation market analysis for anyone – contact our traditional broker to find out what your home is worth. It’ll cost you nothing and you can only benefit from the information.
redT Homes Traditional Brokerage
So, I gave Larry a call and told him about all of the fix-up work I had done, and asked how much my property value may have increased. When he told me what my home was probably worth I was shocked.
Remember, within the last year I had gone from being a renter with no aspiration of buying, to being a home owner experiencing extreme buyer’s remorse. Now, I was on the phone with my real estate agent being informed that my home’s value had increased nearly 50 percent! Larry told me that if I were to put my house on the market I could expect to receive around $350,000 on a house I had purchased less than a year ago for $242,500.
That’s all I could think. Larry came by a few days later and advised me not to sell until I had owned the home for at least one year (tax reasons).
We ended up listing the house close to my 11th month of homeownership, and on the 366th day of owning the 800 SqFt townhome I closed on the sale for $360,000.
Within exactly 1 year and 1 day I had turned a $12,125 investment into close to $100K of wealth gain.
I was curious, and I’m sure a few of you are as well, so I did some digging into what that same home is worth now. The 2019 valuation of my old 800 SqFt townhome is presently $650,000 – had I stayed in ownership all these years, I would have gained nearly $400K in equity from my initial $12,125 investment (5% down payment).
What I learned
Do I regret selling? Absolutely not! And I definitely don’t regret “my disaster of a purchase”, because it lead to my career in real estate where I now own my own brokerage in Denver. I am incredibly grateful that I decided to buy that home instead of continuing to rent.
If you can buy a home, then you should. And if you think you can’t buy a home, you probably can – you may just not be aware of some of the strategies you could utilize to assist you throughout the process. I share this story because the elements of home buying still exist.
I’ve spoken with many young professionals and millennials throughout Denver and most of them share the same inclination about buying vs renting – they often say “I know owning is better than renting. I would love to buy if I could, but I can’t, because Denver is too expensive, and buying a home is way too difficult.”. However, the fact is that buying a home is not as difficult as many people think.
Here is a short list of strategies to help you buy your first home.
Rental income can be counted as additional income to qualify for a loan.
You can buy with a 5% down payment and in some cases even less.
You can get money for a down payment from family members or a friend.
You can borrow money from your own 401K to use towards the down payment.
Just start by talking to a good lender, real estate agent, or anyone else in the industry that can help guide you into owning your own home and investing in your future.
Thank you for reading, I’ve enjoyed reminiscing my experience. Please share my story and don’t hesitate to contact mewith any questions, or home buying stories of your own!