My First Investment

[Andrew Rodgers]

Investment Info:

Townhouse buy & hold investment.

Purchase price: $165,000
Cash invested: $5,775

This was my wife and I's first leap into real estate investing.

We had just started wholesaling and managed to scrape together just enough to convince a bank to buy this house. What I remember most was the hesitancy I had to purchase the home. I went from spending next to nothing ($600/month) on rent to a mortgage, HOA, utilities and all the responsibilities of owning a home.

Of course, now, you look at the investment and you make the purchase 7 days a week and twice on Sunday. At the time of writing this, Zillow is giving an estimated value of $320,000, nearly doubling our investment on paper. We've since refinanced the property to a fixed 3% rate, pulling out cash and keeping our monthly payments similar. Right now, the property cashflows around $700/month.

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

My wife and I started learning about passive income and thinking about retirement. Naturally, this led to us looking for a home that we could eventually turn into a rental as well as reduce our monthly expenses by renting out one of the rooms.

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

I found the deal through my sister-in-law, Allie Pfannenstiel. We ended up looking around for a couple months - looking at SFR's at first then to townhomes because they more easily fit our budget.

How did you finance this deal?

We financed this home through an FHA loan at 3.5% down and an interest rate around 4%.

How did you add value to the deal?

Rather than adding value, we found a deal with value built in thanks to being in real estate daily and having a great real estate agent. However, we added a renter almost immediately to rent out a room and lower our monthly payments.

What was the outcome?

The outcome was, a lot of learning, decreased bills and a butt-load of equity.

Lessons learned? Challenges?

If you asked me when I bought the home, I'd say we made a huge mistake. How are we going to afford these payments? What if the home has issues that we didn't plan for?

4 years later, I can testify to the saying, "Don't wait to buy real estate, Buy real estate and wait".

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

I did, I worked with Allie Pfannenstiel (sister-in-law). She's a great agent and if you are looking for a responsible and service minded agent.

She's the best agent breathing if I hold my breath. -Two Chains, probably