New Member Intro & 1st Deal

[Brian Babbage]

Finally getting around to writing my first post after joining BP a month or so ago. My name is Brian Babbage. I live in Washington DC working for a Consulting firm here. I just made my first investment in the market I grew up in (Lexington, KY) with a couple co-investors. 

The investment was a campus house with 5 bedrooms in a great location for students. The financials are as follows: 

Purchase Cost:  $247,000

Cash Down: $37,000 (15% Down) + $2,500 (closing) $39,500

Mortgage + Tax + Insurance: $1,548

Monthly Rent: $2,250

The house already had tenants who were signed on for the next year we closed July 25th, their new lease started July 30th and runs through the same date 2019. 

Thus far the tenants have been great. They cleaned the house for the first time we came to see it after purchasing, and have told us that they love the house. We bought them a new dryer ($75) and fixed the gutters and downspouts ($62) and removed all the intrusive ivy from the side of the house (free, but grueling. Ivy sucks). 

We have the Tenants on direct deposit using google pay (highly recommend) and also have direct deposit for our insurance payments to the bank. 

Am now looking for other campus houses similar to this one, or small multi-family properties in Lexington. My 1-year plan is now to move back to Lexington and house hack a duplex using an FHA loan.

I could have never done this without meeting an incredible agent, who is also an investor with multiple campus houses. Also couldn't have done it without bigger pockets. 

My advice to anyone starting out. Become at least mostly RE literate before you go to talk to someone who might be your mentor. You don't want to waste a high-level person time trying to learn what cap rate, cash on cash, IRR, etc... means. Do yourself a favor and sit down with a pen and paper and slog through "What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition: Edition 3"

That's all for now, I'll report back on the next deal.