What was your first rental purchase?

Question

This year I'm trying to put thoughts into action and buy my first rental property. I've done research, found guidance from successful business people in my area, and have a partner who wants to invest with me (Heard that could be good and bad).

What I'm want to know from the community is what your first rental purchase was? How much did you pay, and what did that mean for you in terms of returns in your area? Was it a successful purchase and what kind of investment criteria did you hold yourself to.

Thanks for your input,

Josh

Michael Beinetti · Answer

My first rental was as an owner occupant. It was not intentional to become a landlord in the sense that I knew what I was getting into. I bought the house for $122,800. The rent at the time for the upstairs (Boston style duplex) was $630/month, under rented even at that time. I remember the grief I got from the mother of my tenant when we met and I informed the tenant that I was raising the rent to $700 for the up apt. The current rents are now $850 down and $1000 up which meets market standard. The current market value of the home rests in the $170k range.My story is more falling into something good and holding on. I've learned a lot over the years and have continued to expand my portfolio as well as set loftier goals. There was no criteria that I was operating with at the time. I really didn't start thinking that way until BP and I grew closer over the last several years. ;-) The worst thing you can do is nothing.

Joshua Morgan · Answer

Update: 2020 finally bought my first home. It’s a 4000 sq ft triple which I’m house hacking in. I got it on foreclosure for just over $80,000 one unit rents for $825 and the other rents for $700. I put about $10,000 into repairs. 3 years later but I’m finally in the game.

Clayton Plank · Answer

My first was a SFH 3/1 that was right next door to my home. When I first started learning about real estate one of the old timers in our Reia advised me to talk about real estate with everyone. I happened to mention I was interested in real estate to my neighbor one day at our fence. A few weeks later he came over and said he had an opportunity to move back to his home state with his job. I bought it Subject 2. We had someone lined up to move in the day we closed and it cash flowed almost $300 a month. We have since refinanced and it still cash flows to this day.

Joshua Morgan · Answer

@Patrick Wheeler, I was trying to make this deal I'm currently working on more enticing such as a cash deal so the homeowner might be willing to accept a lower offer and a quicker closing date, but I'm having trouble coming up with a financing solution. I want to buy my first property, contribute extra to the mortgage and have it paid off within 3 years. I then want to use that property as leverage for a second or third property. What are yours and other people's thoughts on that method.

Patrick Wheeler · Answer

@Marquis Harris We actually found it on the MLS surprisingly, when it came back on the market. We financed it with hard money, but moving forward we have some banks that should be able to finance a rehab property.

Marquis Harris · Answer

@Patrick Wheeler Nice Deal! Do you mind if i ask how you found, and financed it?

Patrick Wheeler · Answer

Recently closed on a 3-family in the Boston area. Purchased for 390k, putting about 140k into it and should cash flow right around $2,000/month. Great return for no money down!

Todd Magin · Answer

My first property was an alligator by my standards today, because it ate me alive.It was a very small SFH (2 BR, 1BA) that I bought for $55K in 1983, lived in it for two years (single at the time), then rented it out for two years before I sold it (90K) to buy a house with my wife.I rented it for $600 which barely covered the mortgage, let alone anything else. However, it taught me some valuable lessons that I still take with me today because I managed it myself (thank goodness I picked good tenants!). In the end, it worked out OK because of the appreciation, but NOT because it was a good buy and hold property.

Scott Weaner · Answer

Duplex in central NJ, $212k.Rents now for $2700, get about $400/month cash-flow.

Robert Buck · Answer

First rental was SFH 3/2 Bought for 60k Rehab for 7k Rents for 1k could go $1100 but great tenant at 1k Just refinanced and appraised at $124k Our key points for criteria was a good working class neighborhood that we could put sweat equity in and very importantly stay well below 70% LTV with the ARV. Crucial if you want to do many properties. BRRRR.