My first real estate deal (learning to pull the trigger)

[Andrew Kennedy]

Investment Info:

Single-family residence buy & hold investment in Moore.

Purchase price: $200,000
Cash invested: $61,165

SFH (3 bed, 2 bath), purchased for 200k. Down payment (25%) plus closing cost invested.
Originally expected to pay 15k more and $300 more for insurance, so major discount and profit.
Fair Market rent at time of purchase is $1500-$1800.
Original cash flow was at $198/mo but with less in the deal, cheaper insurance, and depending on rent rate, my pure cash flow could be up to $400/mo.

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

This was my first real estate deal and I took the passive investor way in order to 1. Get in to the market and 2. Get exposure to the learning curve with my partner.

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

I have a partner who’s been doing real estate deals for over 15 years. For this deal, I put up the money and he put together the deal, property management, the works. This was a way for me to put my capital from sitting around to use. It also allowed me to get some exposure to the real estate market and the experience has been very educational. From acquisition, to financing, to due diligence, I have learned a lot. The biggest lesson I learned was how lenders decide on financing.

How did you finance this deal?

I did a conventional finance, with 20% down. Had to spend around 3k to buy down the interest rate.