My First Investment

[William Thomas Duncan]

Investment Info:

Single-family residence other investment.

Purchase price: $360,000
Cash invested: $15,000

This was my first property ever purchased, and is my current residency. I house hacked. Two of my friends, plus my sister and her boyfriend live with me. 4 Bed 3 bath with bonus room 2560 Sqft. I purchased when I was 23, and I am now 26. Mortgage is $1860 and they pay me $2400. I do not have pure cash flow, but pays for most expenses keeping my part. This counted in Multifamily Millionaire Volume I, so it counts. My first intro to many things including 1. Obtaining mortgage financing, 2. Owning property, 3. Property Manager. Time for me to grow and make another move outside of this in the coming months

What made you interested in investing in this type of deal?

A buddy and I had looked at getting a 4 unit complex before I decided to purchase my own residence. With only enough resources to do an FHA loan, one of us would of had to live on the property to do it the right way, which was not ideal for either of us. I decided purchasing a nice home and "manage" people I know/trust (has it owns challenges) was the best route for me to go.

How did you find this deal and how did you negotiate it?

I was selling cars at the time, and one of the finance managers had told me I would become a millionaire, and told me about this idea initially. He planted to idea into my head. His bestfriend is a realtor that runs his own team here in Murfreesboro, TN. The Will Johnson Group. Will Johnson educated me on what to look for. We initially looked at the 4 unit complexin many offers before deciding single-family. It was listed at $350k. Offered $10k over in exchange for closing costs.

How did you finance this deal?

I did an FHA loan, 3.5% down.

How did you add value to the deal?

It was a new construction so as far as adding equity there wasnt much to be done. I added a side walk that runs from my driveway around my house to the concrete patio that I also extended.

What was the outcome?

The outcome is $2400 in rent paid to me on a $1860 payment. I didn't want to spend the resources on a lower rate initially so my rate was 4.75, which wasnt terrible for the end of 2019, but wasn't stellar. By the time it came around for me to do an FHA streamline rates had fallen substantially allowing me to get to a now 2.75. Cost of refinance has been covered by the drop in payment and increase in rent vs. mortgage. Has taught me 1. Obtaining Financing, 2. Owning Property, 3. Property Manager.

Lessons learned? Challenges?

I have really learned (still learning) how to bring up things that I thought would be confrontational to others that aren't, and how to properly communicate with people in a business manner while also living with those people, who are also family/friends. We have a really good system going at the house considering its 5 of us total.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Will Johnson, with The Will Johnson Group in Middle TN. He is truly one of those people you have to know, and if you do you are fortunate. He is not just a realtor, he is a professional of the business. He spends countless hours studying and perfecting his professionalism. Consumers, and Investors that work with him do not work with anyone else after. Very good connection to have.