Hey there!

Welcome back to Learn Through Action. This past week, I've really embodied that name.

🔨 WHAT I'M WORKING ON

Buying a Condo

🧠 WHAT I LEARNED

It's more expensive than I thought.

Cheers,

Aswin

... juust kidding.

So to recap from last week: I'm buying a condo that I plan to live in for a year before renting it out. I've been passively looking over the last year, and this condo was one of the first times that I saw a property where the monthly payment (with 3% down) would be less than the rental value in the area.

📄 Paperwork

When you apply for a loan, the lender has underwriters who basically study your origin story until they deem that you're capable of consistently making payments on time.

Here's a small sample of all the paperwork I've had to gather and send over:

In addition to that, I've had:

• Contractors come over for estimates (we'll talk about that in a sec)
• The home inspection (I highly recommend John from ACS Home Inspections)
• The appraisal done ($5,000 above purchase price)

It's a lot of tedious work and some items are more difficult to find than others. But that's just a part of it, and I've been able to get through it pretty quickly.

🤑 Let's Talk Money

Last week I mentioned that repairs could get into the $20k range, which is looking more likely.

Here's a look at a high and low-cost estimate:

A reminder that similar properties in this area go for $325k. So, on my low end, I'm nearly breaking even. And that includes me doing the painting and flooring (if I go LVP) or going with carpet.

floor note: I still don't know what I'm going to do for the flooring. Technically, since my condo is above another, I "have" to do carpet. But we checked with other units and this isn't really enforced. LVP is more durable but I feel like carpet would be quieter... idk I'll figure it out.

It's pretty crazy how expensive even cosmetic repairs can get.

I've been watching a ton of DIY and rental property tip videos and I need to be cautious that I don't over-upgrade the place. You just need your place to be as good or slightly better than similar properties in your area.

For example, I was planning on putting in custom black blinds on all the windows. (This would've been atleast $1000.)

Then I realized that's a lot of money for something that's notorious for getting messed up. So, I'm going to go with curtains instead. (Should be around $300.)

Overall, this house isn't the no-brainer, house-hack, money machine that you'd see on YouTube. But I still feel good about it and feel like going through this process is teaching me a lot, and will hold me accountable to learning about home maintenance, ROI, and the rental business.

Thanks for reading and catch you next week.

Cheers,

Aswin from Learn Through Action