The story of my first foray into real estate

[Christopher Labonte]

Good Morning everyone!

I'm a huge fan of networking, BP, and comradery so I thought I might be able to help someone by posting my journey thus far. 

In my new member intro I went into my backstory and goals a little bit so I wont waste time on that.  Since about March I had been looking in the Clarksville/Nashville TN area for any sort of multi family home.  It just made the most sense to me, and the best way to achieve cashflow.  I ended up connecting with a BP member on the forums who was local and we ended up meeting for a couple hours.  Hes been an investor/real estate agent for 10 years, and now had his own brokerage and property management company.  Definitely goals to strive for.  But he gave me great tools and information, as well as taking a lot of time to let me pick his brain.  There are so many little things about this that are not complicated, but so numerous its mind boggling.  

Through him I offering on properties, but every one that I offered on had multiple offers and I always lost.  The numbers barely made sense at asking price.  So even when I wanted to get my feet wet and offered full price, I'd still loose out.   I kept looking and kept offering, but still nothing.  So I could take a break or hope that something happens, or I can attack the problem a little different.  I've attended the webinars for BP and they always look at properties in random places.  So I figured why not do that, but do it for places only an hour or 2 away.  I started my research and that first night I found 3 properties in Evansville IN.

2 were more attractive on price, but not in the best shape.  They needed some work to bring them back up to their former glory.  Only one problem; even though they needed 10-12k work the sellers weren't budging on price.  They were both 150k, and it didn't look like after the work that was a price that would really give me a return I was interested in.  Now the other property was 240k, however all major items were 6 years old.  Now I have no problem getting my hands dirty and I'm not afraid of having to fix a property.  But for me, numbers are everything.  The effort I'd have to put in the 2 properties just wasn't anything worth while compared to the 240k property.  Maybe for a second or third investment, but not the first.  I need some practice with something "easier" before I go full bore.

If you've read "The richest man in Babylon", it says that a good investment is one where your principal is safe. During my research stage I got lucky and the property price got reduced to 229k! I was pumped, I didn't even have to negotiate and bam the deal was already better. After running the numbers, looking up rents for the area, census data, and calling property managers to confirm my findings it looks like best case it could rent 800 per unit, and worst case 700. Best case cashflow is about 800 dollars and a 17% COC return. Worst case it cashflows 600 dollars and returns 13%. My benchmark for COC return is -- better then the stock market average. So looking at that, it looks to me like a pretty decent first investment. With the principal is safe and major items fairly new, along with cashflow I'm pretty please.

I close on it Wednesday the 18th as of now, and even though this was a long process I really feel like this is going to rocket me onto the path of financing independence and a better quality of life!