First deal done as a long distance real estate investor!

[Bryan Escudero]

Hello BP!

We were able to close on our first deal this week! These are my notes from the deal for anyone who is interested:

Searching through the MLS, I came across a property in Milan, TN. I ran the analysis on the BP Rental Calculator and compared it to my baseline Crystal Clear Criteria.

1. ~1% Test
2. ~$100/door
3. ~8% Cash on Cash Return

This property did not hit all of my criteria as the CoC Return was below 8%, but the $/Door was a little higher ($125). I proceeded to speak to the realtor and have him reach out to the listing agent. The listing said that both properties were rented out at $600/Month and $500/Month respectively. I decided to move forward as this was going to be my "learning" property. I lined up the lending with the lender which came via an investor friend and they have been serviceable. The loan officer is a little intense, but he has given me good tips and he wants to see the loan closed.

As we moved forward, we had to send the EMD, do the inspection, get the survey done, get the appraisal done and ultimately get the leases for the tenants who at this point were on the 2/1 (left side) a new lease at $650/Month for a Year and $500/Month (right side) which is month to month. We were able to secure property management which has been key to confirming rents. Going forward, LS will be pushed to $700 with the new leas and RS will be pushed to $550 with a 30 day notice.

The core of what my wife and I are doing is helping people. We want to bring the property up to spec (~$10k) with a rehab. We will have Property Management do the initial push, then will bring in a contractor to take care of the bigger issues. This is taking care of the tenants. As for taking care of others, we decided to bring in my parents as equity partners in the deal. All the cash needed for the property was ~$42K. Parents will bring in $22k and get half of the Cash distribution monthly which is ~250/month ($125/month for them) and they will own 40% of the equity in the property. This will ensure they get a distribution for the rest of their lives. We will be able to put aside that monthly distribution until they need the cash in roughly 3-5 years. I know this is not the "best" deal for me, but the joy of being able to help my parents is worth any other deal we could have made.

I am excited about closing on our first property...I am equally excited about the closing we have scheduled for next week on our second duplex! Thanks to the BP community for all of the knowledge getting to this point. I hope to be an asset to this group as my real estate journey continues.

Regards,

Bryan