My First Year in RE Investing - Super Motivated

[Brandon Hughes]

I started educating myself on RE investing about two years ago. I started working in a bank and I started to notice how common characteristics wealthy people have when it comes to managing their money. Real estate is one common trait they all seem to have. This is what got me interested in RE investing.

I closed on my first deal last year. It took me nearly a year to find my first property, multi-unit property, under 200k, and one that would go FHA. (I don't make much and I live in the Inland Empire in California) Its not easy to find properties in that price range let alone multi-units in that price range where I live.

Now I partly attribute some of my success so far on being in the right place at the right time.

I made several offers before actually having one accepted. The one that was accepted was sight unseen but once I did a walk-thru of the property I was horrified! One unit was a clean 1 bed 1 bath with long term tenants 3 years and the other, which i intended on moving into was a 3 bed 2 bath thrashed! It was a drug house. The children's bedrooms had locks on the outside of the doors!!! The rooms smelled horrible of urine because they would pee in their rooms from being locked in the entire time.

I made it clear that I would not close if they were still living in the property! Surprise surprise they could not get approved for anywhere else so the seller rented a uhaul for them to move all their stuff into. They eventually went to live with family.

All said and done once the deal closed I bought it for 139k the appraisal immediately came back at 150k. I cant believe it passed the fha appraisal either.

FHA loan was at 3.5%! I'll never get a better rate than that.

So far I have put approx 10k into it! Since I have been living in it I have been doing the work myself and I have put a ton of work into it.

I just went to the bank to apply for a HELOC and they valued it around 208k. I'm ready to move onto my next property. (since I'm nearing the end of the work here)

This is how it will look after I move and rent it...

3.5% FHA Loan @ 138k left

In the process of 30k HELOC @ 5% - Want to have it available if needed for future investments.

Cash flowing $480/mo (including management fee's - self managed) This will increase to $621 month once PMI is dropped (in the process of doing that now).

I Plan on re-investing all the net proceeds from RE back into it so I can continue to grow my portfolio.

Let me know what you all think. I'll post some before and after photos.

Also I really wanted to thank everyone on bigger pockets! I don't post much but I read all the information bigger pockets can offer me. I don't know if I would have been as motivated unless I heard all the success stories and positive attitudes that everyone on BP has.

Thanks again!