What was your first deal?

Question

I’m getting started with real estate investment and I’m curious what was your first deal? As a newbie, I’m doing practice analyzing potential deals and think it’s helpful to hear different perspectives.

What were you goals, what were your strategies (niche, vehicle, market, finance) and what were the biggest considerations?

Account Closed · Answer

My first deal was a single family home that I purchased in early 2016 and lived in until Mid 2018.  The house I purchased just needed cosmetic upgrades throughout, and I performed those while living in it, with the exception of  the kitchen.  I moved in with my girlfriend (now wife) to renovate the kitchen.  I began renting it out in December of 2018, and recently, my tenant has agreed to sign a new lease!

Taylor Hudgins · Answer

Hi Sienna!  Practicing analyzing deals is the absolute BEST way to start dipping your toes in the real estate waters.  For our first deal, we knew our number one goal was a cash flowing rental and, of course, something we could afford as first time investors.

We purchased a home for $59k with about 698 square feet needing some cosmetic updates.  It's definitely on the smaller side, but it worked out perfectly for us!  We were glad that we went with a smaller home knowing that if something catastrophic happened (*knock on wood*), we wouldn't be pushed into foreclosure.  Our mortgage is currently $395 and we rent it out for $875!

Best of luck to you and your new investing journey!!

Amber Boskers · Answer

@Sienna Parker

Hi Sienna,

We started investing in the Arizona area when the market tanked. We are Canadians and came in with cash (the Canadian dollar was worth more than the U.S. dollar at the time) back in 2010. A bad market in an area can be a great opportunity for investment, depending on your timeframe and goals. We loved Arizona so the location was a no-brainer. We found a great agent who taught us alot about the purchasing process and buying smart.

A few years later I learned about wholesaling and gave it a go, I got my first deal from a no-nonsense FSBO from Craigslist.

While I did that I was also doing a full renovation on our primary residence (while living in it). That was quite the learning experience!!

We are permanent residents now - I have my real estate license and work for an amazing brokerage.  I help people find, buy and sell properties - especially investment properties, and also gives us more opportunities to add to our investment portfolio.

Whatever you decide to do, do your research, ask questions and then go for it!!

Account Closed · Answer

I did a typical 30 year conventional mortgage putting 20% down.  Renovations happened when I was able to save up the money to do them.  But when I bought the house, I did have intentions of using it as a rental once I moved out.  There was no timeline of when I'd move out though, but it ended up being only 2 or so years.

Gail W. · Answer

My first one was in 1985, (telling my age here). I bought a 2 bedroom house and my wife and son lived in it for about a year. i bought my first farm and we moved into it and rented the house to a family "friend" This gentleman proceeded to destroy the house right away, he lived there 6 months before I could get him out and paid a little over 2 months rent. I sold the house for a loss to the church next door, and they tore it down and made a parking lot.

Fast forward to 2019 and I bought 3 properties last year 2 of which are cash flowing and 1 needs rehabbed. I have learned my first experience was my fault. Didn't see landlording as a business, rented to a "friend", no tenant screening, didn't keep a close eye on what was going on there, etc.

Joshua D. · Answer

@Sienna Parker

Good for you getting started!  My wife and I moved into a small duplex for our first deal and rented out the basement unit.  Great starting place.  One mortgage and easy to figure out stuff.

Good luck!

Joshua Mellor · Answer

@Amanda Hadd

That actually came over the years.  I put about 3k out of pocket to fix up the unit I lived in when I purchased and the rest has been over the years so really only had 3k out of my own pocket.  My biggest mistake though was to treat the rent as my income and not set aside for more purchases.  I have recently corrected this.

Amanda Hadd · Answer

@Joshua Mellor

Hi! I have a question about your story, did the 10k of repairs come from the loan or out of pocket?

Did/do you rent all 3 units out?

John Teachout · Answer

Our first rental property was a 3/2 in Hampton. Bought it as an REO in 2011 when the market was pretty much bottomed out there. (wish we could have purchased the whole subdivision as much of it was for sale). It was a cash deal for $33,000 and we spent two years fixing it up. It wasn't in that bad of shape, we're just slow and had very limited opportunity to work on it. It rented for $850 in 2013 and still has the same tenant in it now that just renewed a two year lease. We later purchased another similar house on the same street but paid about $66,000 for that one. Now they're going for $100k and up.

Jim K. · Answer

@Sienna Parker

Do a search on "what was your first deal" and you'll find a good dozen or so threads like this in the archives.

What was your first deal?

Most Popular Reply