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Updated almost 7 years ago on . Most recent reply
My First Deal - $4.4 MILLION AND SELLER FINANCING
Where do I begin???
Last year I joined Bigger Pockets and started my journey as a real estate investor. I had no experience in real estate other than my personal house. I had a very successful career. Then my son was born premature and he needed a lot of care. So I decided to leave my career and pursue real estate so I could have the flexibility to care for my boy.
I consumed everything about real estate. Podcasts, book, youtube... everything. Thanks Bigger Pockets! I even became a real estate YouTube vlogger myself to document my journey after I quit my job.
11 months later I closed on the biggest deal that I couldn't possibly have ever imagined doing! A 54 unit apartment complex in North Carolina for $4.4 MILLION. I negotiated the deal so that I only had to put down 10% and the seller agreed to owner finance 90%. The owner was willing to take $4 MILLION in seller financing from someone he never met and someone who had zero real estate experience. I don't think he even checked my credit. I would like to say that I am a pretty good negotiator but I am probably just "lucky". My experience has been the more time you put into something and hustle, the chances of you hitting that lucky deal increases.
I am in the second full month owning the property and I feel confident that I am going to hit the numbers that I modeled. I underwrote the deal at a 25% IRR which is a crazy return. The other fact is that my boy is very healthy now so everything worked out. My next goal for 2018 is to acquire 100+ units. The crazy thing is I got another deal where the seller was willing to seller finance a $10 MILLION deal. The numbers didn't work for me on this one so I am still searching.
The moral of the story is that it is totally possible to do this real estate thing in a big way. You just have to have the right mentality and the develop the skills over time. It's definitely a numbers game. How much work are you willing to put in before your get first big deal?
Most Popular Reply
@Joe Splitrock Sure. I negotiated $4MM loan with the seller. The term was for 10 years. Amortization of 30 years. Interest rate of 3.75%.