How'd you Purchasing First property?

Question

How did you finance you very first deal? What's the story behind getting financing?

If you had to go back and do it again would you use the same strategy? If not what would you do differently?

Conner Olsen · Answer

I found a duplex that had been sitting on the market for 45 days and in my market (Austin, TX) this is an eternity. Something had to be wrong but the inspection came back clean and no capex deferred maintenance. The rents were low and it didn't make sense for normal year-long leases. I used monthly rentals on Airbnb to double my revenue and make it a good deal. Down payment was 15% owner occupied loan at 2.75%. I purchased it November 2020.

If I went back I would use an FHA loan. I wanted a larger down payment to be easier on me financially, but I would rather have that extra 11.5% sitting in a bank account and slowly drain it to cover the difference between my monthly expenses and rent.

Todd Brown · Answer

@Tailer Chase

I just closed on my first property about two hours ago! I Had to go with a Portfolio loan do to the nature of the property. 2 houses on one lot. The down payment was 15%. 20 year loan at 4.99%. As far as I can tell right now...

Cons-The Portfolio loan isn't the cheapest option regarding interest and length of terms. You have to find a small local bank to get one. The rate will be adjusted up to three times over the life of the loan Which could potentially cost me more per month down the road.

Pros- On a property that won't qualify for traditional financing it can still help get the deal done. Also, most traditional lenders were requiring 20% down to the Portfolio loan actually cost me less up front.

Richard Loniewski · Answer

I got my first deal done with $1,000 (made 55k on that deal). I got approved for a hard money loan, through networking partnered with someone for their experience to get better terms, then found someone to gap fund (my barber of all people) and I put the deposit down and ran the project. I had to give up 40% of the profits but I got the first one done. 7 years in the business still going strong!

Jordan Moorhead · Answer

@Tailer Chase I bought with an FHA loan. I needed roughly $7000 down and didn't have enough money so I borrowed a lot of it from my Roth IRA. I'd do it the same way again and still buy with FHA loans.

Sher J. · Answer

old school, saved cash for a down payment. I would do it the same. Saving taught me the basics of how to manage money... which will be a large portion of owning/managing real estate.

How'd you Purchasing First property?

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