Intro and investment summary so far (1 of 4)

[Lars Hasseler]

I started investing in real estate in Memphis, TN in March 2019. It's been great. Since then I've expanded to three other cities, which will each get their own post, but Memphis remains in my top two. I have two SFRs there and they are both cash cows. One was initially over $5000 in repairs and included an eviction that year. But since then, it's been great. It helps that of the four cities in which I've invested, Memphis has the best (in my experience) property manager. Reedy is a hard nosed (in a good way) property manager which I don't have to ever badger. One down note with them- they hold the rent a full month. So if December rent comes in on December 4, I don't get it until January 12 or so. Other than that, I highly recommend them.

I financed it from savings I had and by taking small mortgage loans from Northpointe bank (based in California). The properties are in my name (which I don't love), and the interest rates can be bought down to 5%. That's not the best rate I've heard, especially in 2020, but it got me in the game, and for that I am grateful. Northpointe required 20% down, which was fine with me. The first house was $50,000, which I negotiated down from $52,000. I didn't know much at that point, and I wish I had bargained harder. EMD, inspections, and closing totaled $14811.47 to initially own an investment property, with a opening mortgage of $373.15 and a rent of $750 (Section 8, $263 was subsidized, $487 from the tenant). Escrow adjustments have since dropped the mortgage to $339.97 (annual property tax of $1,000 is helpful). In this specific example, Section 8 has been beneficial to me because it has encouraged the tenant to pay on time or risk losing Section 8 eligibility. So to new investors wondering if they could ever afford this, $15,000 can get you going. And I'm sure other people out there have done it for far less. I would like to pivot into multifamilies in Memphis, but I know I need to get the finer points of deal-finding and deal-making down. I'm quite behind in the Bigger Pockets podcast, but I'm listening to #167 with Kevin Woods and his experience on multi-family buying. Thanks Kevin, you've already saved me thousands.