First Investment Property

[Kenny Loper]

Hello BP,

I’m currently staring out in my multi-family investing journey, I do not need any specific advice at the moment but I would love to hear how you started investing and where you are at now in your investing career and maybe include what your best and worst decisions were along the way!

Thanks,

Kenny

[Matthew Porcaro]

Originally posted by @Brendan Chetuck:

@Matthew Porcaro

What exactly did you use the 203k loan for? Was the duplex a fixer upper or did you just improve it to be able to rent it out for more?

 Hi Brendan - 

So my strategy was to use a 203(k) to buy a foreclosure (typically the only 'mortgage' you're allowed to offer on a bank owned property with). I then wanted to refinance as soon as I could, move out, and rent both units. 

I found a duplex that was in foreclosure. I real disaster of a house haha. I got pre approved for enough to pay for the house, plus the $100k it needed to get it back in. I put 3.5% down (about $10,000), and then hired a contractor I knew to do the rehab. 

It was a full gut, everything brand new, but it was needed. I did the math, and knew that when I was done I was able to get more than enough to cover the mortgage with rent. 

The Rehab took about 7 months. Once that was done, I realized I had enough equity to refinance. I refinanced immediately, getting rid of the PMI, and the 203k requirements for me to live there.

I then put it up for rent, and got two tenants in both paying $2450/mo. It now cash flows $2000/mo for me. 

In addition to that, with the equity I built in during the rehab, I've been able to leverage that cash to get into a few flips I've done since. I'm closing on my current flip  next month. 

If you have any questions about this, please feel free to reach out here or by PM. I love helping people with this.