1st Deal as a single 25 year old

[Adam Lakeberg]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $205,000
Cash invested: $25,000

I didn't know how to analyze deals or even what a good investment was. I just new I wanted to buy my first place and hoped it would be a place I could keep as a rental as I spent a few years living in it saving for my next place. Man I wish I knew about house hacking and a way to build my real estate portfolio faster but I didn't. I do know that no matter how you do your first deal it will teach you so much that looking back you'll be glad you did it.

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

I knew I wanted my first place to be low maintenance. I didn't want to get surprised by a big bill to fix my roof so I felt a 3/2 townhome was a good starting investment. It offers amenities like a work out facility, internet, a pool and front yard care in the HOA. Yes the HOA eats into my monthly cash flow but I also haven't had to pay to fix anything more then a light or a microwave in the 5 years I've been renting it out. I've also only had one vacancy that was less then a month!

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

MLS, standard purchase as a first time home buyer with a 30 year mortgage 10% down at 4.2% interest

How did you finance this deal?

My own savings

How did you add value to the deal?

Renovated 2 full bathrooms and the Kitchen as well as builtins in the living room for more storage.

What was the outcome?

Still a Longterm rental that is cash-flowing $322/mo. It has doubled in value since we owned it now appraising for $410,000

Lessons learned? Challenges?

It isn't easy to cashflow well right away in a high priced market like Portland. Wealth builds slowly but we covered our costs and have been able to increase our cashflow as time goes on with increasing our rent price. Even if the real-estate market hadn't appreciated so much in the last few years we still would have done well with building up equity that our tenant is paying. We also get the benefit of tax deductions! I regret not buying more back then, just find a way to get started!!