Back to the past

[Elizaveta Voloboeva]

Hello everybody!
I'm still trying to set up my plan and instead of asking the same on BP question "What strategy to choose" I'd like to ask a couple other questions.

1. Could you tell a short story about you first deal?
2. Why did you decide to do it the way you did?
3. Would you do it different knowing what you know now, and what would that be?

I would really appreciate the experience anybody can share!

[James Vermillion]

Elizaveta, I will take a crack at it since no one has responded yet.

1) My first deal was a fairly in depth rehab which included foundation repairs, window replacements, garage roof replacement, electric work, plumbing work, floor refinishing, and a lot of the things we do to almost all our rehabs (new light fixtures, new outlet covers, new appliances, new doors, etc). We found this property on the MLS. It was an REO and had been on the market for quite some time and recently undergone a large reduction. In the end we spend about $23K in rehab costs and came away with a profit of around $22K.

2) We decided to purchase this property after having looked at many and putting offers on quite a few, always to come away empty. At the time we did not have a lot of capital, but finally found a bank that was willing to lend to us (rehab costs included), but we still needed something fairly cheap to be able to make the down payment and have funds left over for reserves and paying other expenses (utilities, insurance, mortgage payments, etc). This property met all of our investment requirements so we made an offer and after several rounds of negotiating we had the property under contract.

3) I would still do that deal today. The biggest thing I would have done differently would be in the negotiations to purchase the property. That was my first ever property purchase (investment or personal) and my lack of experience led to us paying more than the property than we could have. I should have stuck closer to my offer in the early stages to see how they wold react. Overall though, I am beyond happy with how we handled the acquisition, renovation, and sale of our first property.

By starting with rehab flips we were able to generate more capital and have since started expanding strategies to include holding rental properties. I am a big believer in the fact that there are benefits to many different strategies and if you are able to use multiple strategies to reach your end goals, go for it, just make sure you are educated and prepared to initiate multiple strategies.

That is the very short version, but hopefully if helps a little.