1st Deal Ever - in twos

[Cory Melick]

Hey BP Community,

I've been a little silent here since I introduced myself a few weeks ago. For those who might not have read my introduction, my wife and I are looking to jump into real estate investing. Her style is CDs, I like small cap stocks (opposites do attract). So I've been gleaming everything I can from the BP mastermind and looking for a 1st deal that will be a good compromise and ease us into landlording as poison of choice is buy and hold.

So our first deal is a pretty safe and conservative deal. We looked for about a month and couldnt really find anything where the numbers worked and that was a good location (numbers for me, location for her). Of course, as dumb luck would have it, I was on my way home from work and listening to one of the BP podcasts and they happened to be ripping on @Brandon Turner for being on a roof. I was enjoying the podcasts so much that I missed my turn and ended up in a part of my rural area that I hadnt previously been before. And low and behold they were developing a new neighborhood. I'll spare you the boring details but the next day me and wife looked at the new construction townhomes and put in an offer for one of the next set they are building. Offer has now been accepted.

Purchase price - 110K. 4/2.5 2100 Sq Ft

Comps-140K local rent - $1400

This area definitely has a strong demand for townhomes (seen them fly off the shelf) and renters are typically young families that will stay several years. Its not an amazing deal (1.25%) but as a first deal to ease me and the wife into things, learn the ropes, and not have to replace a roof in a year, we'll take it.

Now, why it came in twos. In the week between the offer and the acceptance, I was helping a buddy of mine install a steel building on his property. This would be the second 3 bay building on his lot. He rents the bays out to folks to work on cars, store cars, store equipment, whatever. He had two units that werent rented on the building we were working on and he explaining how he wanted to build a 6 bay on the other side, but he wouldnt even start thinking about that until this one was fully rented. 5 minutes later a guy shows up and rents the last 2 for him and buddy to work on cars together. 10 minutes later a renovator shows up wanted to rent 3 units because he has like 9 mini storage units rented and they are not near each other and it makes his life difficult. Of course my buddy turns him down but mentions that he will keep the renovator in mind with his next building.

So naturally I ask him when he would start on the next building. He explained that he didnt have the cash now, and he wasnt willing to take a loan. After a quick discussion and a call to the wife, she and I are financing his next 6 bay building (ground breaking to happen in May). We'll be in at ~$26K and collect $1000/mo in rent (provided they stay rented)!!!!

To any new person reading this, you will hear over and over and over again, you can educate yourself all you want, but without action that education will not amount to much. I spent probably 5 months stalking about the BP before I finally introduced myself and a month later (and about 16 viewings later) I have two deals put together! Keep educating yourself but also take action! To the experience folks out there, I owe a great amount of thanks for allowing me to learn soo much in so little time from this very open and encouraging community. Couldn't have done it without yall.

Sorry for the long winded post!