Closed on my 1st Investment!

[Dominique B.]

Investment Info

PP- 53k

Closing – 3k

Repairs/Rent-Ready updates: 5k

Additional Holding Cost (Rental and lead inspection, home inspection, etc.) – 1k

All in Costs – 62k Cash

What made you interested in investing in this type of deal?

My goal was to purchase a buy and hold for passive income. After running the numbers and approving of the block, the deal made sense.

How did you find the deal and negotiate?

This was an off-market deal that was sent out via a mass email blast. I opened the email at 2am, scheduled to see it at 4pm and made the offer at 4:15pm.

How did you add value?

The property was nearly turnkey. I made minor repairs based on feedback received from the home inspection and cosmetics updates (repair roof over porch, replace carpet, new paint, new blinds, and update appliances)

What was the outcome?

I have hired a management company to handle placing a tenant and the day-to-day operations. Rental comps in the area will garner $1300 – $1500. I will be putting a HELOC on the property and pulling out 75% of my funds to use as another cash buy for my second property in March.

[Dominique B.]

Originally posted by @Tracy Fascia:

@Dominique B. Congratulations on your first deal!! Would you mind explaining in just a little more beak down details for me? Did you put down cash saved to purchase? How does the HELOC work on your next purchase? Thank you

Sure, hope this helps:

1. Personal capital for this deal was acquired from my W2 savings over a 10 month period.  

2. All in cash purchase for this was 62k. 

3. Home is owned free and clear.

4. Local bank will be extending a HELOC at 75% of appraisal of property.

5. For example purposes, lets say the home appraises for 68k. I now have a LOC for $51k that I can use similar to a credit card and I am now positioned as a cash buyer to sellers.

6. I find another deal that meets my criteria. I pull the LOC plus using personal capital to cover the difference and purchase H2.

7. H1 is now leveraged. H2 is now owned free and clear. 

8. CF from H1 and H2 plus personal surplus income is fired at the paying off 51k aggressively and quickly. 

9. Once 51k is paid off, H1 is now back to free and clear and 51k is there to be pulled out again for purchase of H3.

10. Pull 51k, H1 is now leveraged, H2 and H3 are now owned free and clear. 

11. Repeat steps 8-10 over and over to scale.