Closed on my first investment property!

[Justin Aymer]

Just got the keys to my first investment property! Thanks bigger pockets for all the help along the way. I couldn't have done this without you guys.

[Justin Aymer]

@Account Closed @Chris K. @Joel Somerset @George P. @Raymond B.

Thanks for the comments guys. Here are the details of the deal:

The Story

I found this duplex on Craigslist as a For Sale by Owner. Each unit has 2 bedrooms, kitchen, bathroom, living room, dining room and access to the basement. They were asking $50,000. It was owned by a lady who passed away about 7 months ago and the home went to her kids. The family didn't live in the area and didn't want to deal with tenants and repairs. I offered them $30,000 and they accepted. Similar properties in the area were selling around $85,000. This duplex does need some significant repairs, but nothing crazy since this home was built in 1923. The duplex appraised for $95,000 subject to repairs. One unit currently has a tenant, but he only had a verbal agreement with the previous owners. He pays $250 in cash a month. I called him to let him know about the major remodeling and future rent change. I offered him first dibs on the application, but he can only afford $450 in rent. I did a quick internet search and emailed him 8 apartment options in the area in his price range. I also offered to help him move. He was really cool about all of this and plans on moving in the next week.

Financing

I did a traditional loan through a small local bank. We are doing the loan in 2 phases. Construction Phase will be interest only payments on the amount we draw for up to 1 year then I will refinance. I can refinance at anytime in that year. I will refinance into a 30 year fixed after we wrap up construction.

Estimated payments - My first construction phase payment will be about $66. The max it will be is around $248 if we draw the full amount. The 30 year fixed payments are looking to be in the $520 - $550 range. I hope to have the remodeling done in 1 to 2 months.

The Numbers

Purchase Price - $30,000

Remodeling Bid - $48,000

My Money Down - $12,448.53

Taxes - $1,300 / year

Insurance - $621.53 / year

Rents - $600 - $625 per unit

Tenants pay all utilities.

I am sure that I am missing some important details here. Let me know if you want other information about the deal. The Bigger Pockets Podcast was extremely helpful in this whole process. I felt very prepared to pursue this deal and get it to closing.