First Deal- Cashflowing 3plex house hack- Thanks BP!

[Josh Dillingham]

I joined BiggerPockets a few years ago when I was researching ways to build wealth.  I logged in Browsed a bit, got distracted and didn't come back.  About 9 months ago I logged back in and started reading forum posts.  It wasn't until that time that I started to realize I could actually buy property and started building wealth...not 5 years from now, like I had always convinced myself, but now.  So I took action, just like the blogs and forums say.  I set up a viewing, then I made and offer, before I knew it I was way in over my head on a short sale of a Tri-plex.  Flying by the seat of my pants every step of the way. Running to bigger pockets every day for more information Now I'm about 3 weeks into ownership of that property after a 4+ month contract period and many headaches. 

Not surprising, the single most helpful individual in this whole process was someone I met on Bigger Pockets, who would become my loan officer, @Upen Patel, with The Federal Savings Bank. He was always prompt in answering emails or phone calls, seemingly working all hours of the day and night (I'm sure I appreciated that much more than his family!) This deal almost died multipule times, with issues regarding third party approval of the short sale, and FHA required repairs in order to close, and each time I hit a road block, and my agent and myself were scratching our heads Upen was there to point us in the right direction. Being involved in REI makes Upen invaluable to someone like me, a first time home buyer with an eye one investment properties. He was even able to work his magic to arrange and escrow account for exterior painting on a standard FHA loan, which I was told by local banks wasn't possible. Without Upen's expertise this deal never would have been done.

To the numbers: I bought the house with 3.5% down using an FHA loan. I will be occupying one unit for at least a year or two, per FHA requirements, and I currently have the other units rented out. Purchase price was $122,500, financed $118,000 at 3.75% the town assess the property at $162,000, it was appraised at $124,000 due to deferred maintenance which I plan to correct within 4 months of ownership. My Total monthly expenses (including savings for repairs) will be $1,500 and I am currently receiving rent for $1745 for a cash flow of $245 but when I move out of the bottom unit and rent it the cash flow will rise to $1195.

My plan is to make necessary repairs to force appreciation and get a new appraisal in the summer time which I hope will be for around $170,000. Then refinance and cash out some of that equity and start the process all over again. BRRRR

I wanted to write this so that if you are in the same situation I was in a year ago, Thinking you are years away from getting started in real estate investing, know that  you are much closer than you think.  Keep learning and keep searching for the deals, once you find that deal you'll realize not only can you afford to invest, but you can't afford not too!