Once again, Dada got an amazing deal. She paid $220,000 for the home, $179,000 less than the asking price and less than half its appraised value. “I applied for a home equity line of credit against my duplex and used half the funds [$20,000] as the down payment,” she says. She rented out her duplex apartment and moved into her new home in 2006. Dada later decided to convert the single-family home into a triplex of three two-bedroom apartments.
To convert the more than 100-year-old Victorian, Dada applied for a home renovation loan. The six-month renovation, which started in April 2008, stretched to just over a year and went $3,500 over budget, but Dada was able to rent the units quickly once the work was complete. The mortgage on the triplex is less than $2,500, with monthly upkeep less than $100. Dada is already renting two of the units (for $1,125 and $1,175) and will rent the third, which she currently lives in, for $1,000 this month. She plans to move out of state to explore other opportunities.
Although risk is involved and property values can fall, Dada has done well as an investor. Her properties have allowed her to quit her full-time job and invest some money into Signature Red, the women-targeted marketing firm she opened in 2009.
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