My experience - Looking to Build on it

[Brian Ellis]

If you like reading, here you go, this might interest a few (some progress photos below):

I had looked towards Biggerpockets a few times over the past, when I was looking to buy my first property. I was so excited when I learned I was pre-approved for a loan, I couldn't help but go crazy looking at houses, multi families, etc. I learned a lot throughout the process, and with NO experience I had to ask a lot of dumb questions.

I started looking in October of 2016, and it seemed like all those houses on the market started to vanish overnight. Prices climbed fast, and the inventory shrunk. After about 6 months I got really discouraged. I had to pass up a lot of properties early on, because at the time I didn't have the capital. I remember there was land for sale @ 40k, in a prime area. I wanted to buy it, but I couldn't (because I needed the money for a down payment on my first home). It seemed like a good investment, I couldn't believe it was so cheap. Fast forward 6 months it was relisted at 180k and sold in a month. This was happening with every house in my area too. I'm talking about beautiful homes that had been on the market for years, vanished overnight in october/december of 2016 and were being flipped for HUGE profit in 2017.

By the time I found my home, prices were the highest they had been. I made about 15 offers on other houses and was outbid every time. I ended up buying a fixer upper. The house didn't have anything I wanted. It had no character, it was a pre-fab home, and it was listed way above its value. You could smell the mold when you walked in. Everything was the same as it had been back in 1970s. It was rented out for 20 years prior to me buying it. But I was sick of renting, and I wanted to call something mine. It had an open house, and I went alone. People would walk in take 5 steps and walk right back out. I was intrigued though, I knew this could be an opportunity for a couple reasons: 

1. It was the nicest area I had been looking, location was perfect & perfect for me as well.

2. No one was interested in it, meaning I had some time to figure out my game plan. By time, I mean a week. Every other house I was lucky to get an hour to make a decision.

So, I made an offer 20k less then its listed price. They accepted right away. I got the inspection and I knew that this was my opportunity to get a good deal. I had all my friends in the trades come over and give me their expertise. I had estimates written up for the amount of work that was needed, every little thing that needed to be done was now on paper. I provided this to the seller and after weeks of negotiating we had agreed to a sale price 60k less then its listed price. I'm not saying I got a steal because I didn't, what I am saying is I had to be really really smart to get a decent deal in this market. And what made or break this deal was the location. If you put my home in any other neighborhood, its worth 65k less. 

So it was time to get to work. I gutted the place to the studs single handily. What a nightmare. I was sleeping on plywood and a mattress on the floor, waking up with dust boogers and spiders. The house had nothing, just wood, mold, and a lot of rot. Luckily my plumber friend hooked up the second bathroom downstairs In the basement so I could at least shower and go to the bathroom. I spent most of my days at work an hour away, then coming home to do more work on the house. I have done mostly everything myself, with the help from a few friends in areas I didn't belong messing with. I'm also fortunate to have received some financial help from my father. He refuses to be paid back, but I could easily do so with the equity in the house. I would say there is about 125k in equity in this home, with room for more. I have more trim to do upstairs, and an entire basement level to finish. Here are some before and afters:

I have a long way to go, but I'm happy with my progress. My next goal is to network, and really was the purpose of this post. I didn't get any of this done completely alone. I took advice and I learned from people with previous experience. I was eager to listen and learn, and I strive to continue to do that. I have heard of HELOC, and have done a little research in using it to purchase an investment property. It worries me because I don't want to get myself into trouble financially, or end up losing everything ive worked hard for. I'm just beginning to tap into my potential, but I need help getting a step further.

Thanks for taking the time, hope you enjoyed this post

-Brian