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Closed on my 1st Investment!
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.
Congrats Dominique, thats exciting. I am starting out as well (no deals to date), can you tell me more about your email blast. What was your criteria and how did you get the list?
Did you find this property from a wholesaler?
@Dominique B.
Hey Dominique,
Great job on getting started!
Would you you say buying your first property was harder or easier than you may have anticipated?
Best,
Josiah
@Dominique B.
Congratulations on your first deal! Curious with only 5k in repairs it sounds like it was already at market value? Based on you getting a HELOC, how will you scale for the next one? Will all your cash flow go into paying down the original HELOC (once you have your second one?) Or will you be getting a 2nd HELOC?
This is a unique strategy to keep your capital working for you on these lower priced homes you probably would have trouble finding financing for anyway.
@Josiah Patrick Zebarth for me it was easier than I thought but I didn’t have reservations (or analysis paralysis) beforehand. I decided in October to use this vehicle to meet my goals, hit the ground running and closed on this in December. I found the most value being out and hands on.
@Andrew Kougl actually I have a small bit of equity in it. Comps in the area are in the low to mid 70's. But for me and my goals, equity is secondary to cash flow. As for strategy I have a couple paths I can take but I'm leaning toward rolling both properties cash flow plus my surplus income into the HELOC and continue to rinse and repeat. With this I will be rolling into the 3rd property with 2 owned free and clear in about 6 months.
Surprisingly I found a few banks that offer mortgages on 50k homes, Navy Federal Credit Union being one. For me, being free and clear out the gate and then doing a modified (and recyclable LOC) to scale was the path that worked best for my goals.
@Dominique B.
Congratulations on your property ! How long did the renovations take and did you experience any problems while renovating ? I just turned 18 and am working to get my real estate license and eventually become an investor so I am curious !
@Thomas Martinez the updates were minor and took about 4 days total working time to complete however, I was delayed about a week and half due to the first set of quotes being ridiculously high for no other reason than contractors trying to get over (I received quotes ranging from 8k - 23k smh). So I had some sunk time in having to research and vet more straight forward and trustworthy contractors to complete the work.
Good luck to you on your journey!
@Dominique B.
This is a very motivating post! Congratulations on your accomplishment. Wishing you much success on your next endeavors!
Any tips for someone who JUST recently became interested in this business?
What goals should I be setting for myself as a beginner?
@Kyarah Golden thank you and much success to you too!
I’m honestly just starting out as well but I can tell you what worked for me was doing the research, determine what path you want to take and work your path backwards so you know how to step through it. Oh and take emotions out of it; that goes for the property and people. It’s all about the numbers and if they move you forward on your path. If so great, if not just move on (or around folks) and keep pushing. Take nothing personal.
@Dominique B. Congratulations on your first deal and may you continue to have a successful 2021. My goal is to have my first within in 90 days. Also, thank you for sharing your story.🙏🏽🙌🏽🙏🏽
@Dominique B. Congrats on this awesome first deal Dominique. I love the creative nature with the HELOC and recycle of capital. Usually you hear refinance more but you went at it from a slightly different angle there. Keep crushing it in 2021!
@Dominique B. Thanks for sharing the info, late nights are proof that they pay off, looking forward to hearing about your next investment😁
Nice! Congrats @Dominique B. I also like that you're already set for the next one.
Cheers
That's exciting and fantastic. Which market did you find this in? I serve the DMV and love finding golden nuggets like this one for my clients.
@Dave Rich thank you and good luck on smashing your 90 day goal! You got this!
@Dominique B.
Congratulations! That’s amazing!
@Allen Williams I was actually planning on refinancing until I spoke to a loan officer when doing some research/product comparison and she asked me why would I want to put a mortgage on a property I owned free and clear?! I did more research and using my property as a credit card essentially to leverage and continue to recycle was the better option for me.
@Daniel Umstead lol yes they do. Sleepless nights has it benefits sometimes.
Love to see it! Any tips on recognizing a good wholesaler vs someone who isn't?
@Kanwar Sodhi I live in the DMV but investing in Baltimore. This property was not listed on the MLS though, I found it via a wholesaler.
@Terrell Doyle I say build a rapport with them. I actually haven’t run into any not so good ones as of yet but I watch closely to what my resources send me and will be contacting the ones that consistently have deals that align to my numbers next month.