How a 26yr Old Made a $70,000 Profit
So Here's What Happened...
At the age of 23, right in the middle of her final year in college, a young woman dared to navigate the often-intimidating world of homeownership. Her name is Myranda and her journey is one brimming with courage, hard work, and inspiring lessons for all young adults to learn from.
Just as she was nearing the end of her college years, she took her first bold step towards financial freedom by buying her first home. Myranda had begun meeting with her realtor, Ryan Veit, about 6mos prior to buying a home to begin learning the ins and outs of the homebuying process and to come up with her Homebuying Plan. As she approached the end of her senior year of college she knew that her company would likely be offering her a salaried position upon graduation and from her conversations with Ryan and her lender she knew that once she had a Salaried Position she wouldn't need 2 years of income/job history to qualify for a loan.
At this time in NW Arkansas rent was still about $1,000/mo for a 3bed house which she split with a roommate to help save money. Knowing that the landlord was already planning on increasing the rent at renewal made that jump to homeownership an even smarter move. It wasn't just about the financial practicalities, though. Excitement bubbled within her about the extra square footage and the promise of a yard - her very own patch of earth. Though some might have been nervous about making such a purchase at a young age, she was more focused on the possibilities it offered.
Coming out of college she didn't have much in terms of resources but her realtor had taught her about the RD Loan (Rural Development) process and how she could get a home for $0 out of pocket. He also told her that motivated sellers and some builders also paid for the buyer's closing costs. Armed with this knowledge and encouraged by her wise parents, she decided to purchase new construction to avoid potential issues with pre-owned houses. It was a smart move, at least in theory, given that new builds often come with fewer immediate repair needs.
That's not to say that "life" doesn't happen. Just 3 years into owning the home she had already experienced multiple bad hail storms and eventually needed a new roof. A project that costs about $7,000 but her insurance covered the bulk of it and her out of pocket expense only came to about $1,500. Her story underlines the importance of having an emergency fund set aside - in her case, three months’ worth of cash - for unexpected home repairs.
The builder provided incentives to work with specific lenders, including covering closing costs. It was not just a house she was buying, but also a new refrigerator, dishwasher, and stove/oven.
Never one to shy away from hard work, she even tackled labor tasks herself, putting in $1,000 from her pocket for materials and paint. These small but significant investments not only added personal value to her living space but also contributed to increasing the home's worth.
After three years of living in the house initially purchased for $154K, and adding a value of $1,000, she sold it for a stunning $225K. This equated to a profit of $70K - a significant achievement for a young homeowner. To put this into perspective, had she continued renting at $1,000 per month for three years, she would have paid $36K, enriching her landlord while emptying her own pocket.
And so, by the age of 26, with three college degrees under her belt, she found herself completely debt-free. It is not only the financial freedom that's commendable here but also her courage, perseverance, and shrewd financial planning.
Her story serves as a testament to what young people can achieve with dedication, smart choices, and a willingness to learn.
Legacy Learning Points
Myranda's story is an excellent example of how young adults can get out to a fast and profitable start in this world. Surround yourself with the right people, be curious, make smart money moves, take your time to research the opportunities but be decisive when it's time to act.
