A year in the life of a new investor - Thanks BiggerPockets!

[Jon Lafferty]

I have been a member on BP for a little while now and thought I would share what my first year of investing has been like.

I have been interested REI for 5-10 years. Prior to the bust in 2006-7 I had attended a few REIA meetings and was ready to start until 2007 when I was deployed to Iraq. Investing was not at the forefront and when I returned it took some time to settle back into normal life.

Fast forward to 10-2013

The day job was really taking it's toll on me stress wise and re ignited my passion for REI again. March 10, 2014 enter Bigger Pockets and my greatest education in REI. I listended to every podcast, read many forums and studied what others were doing. I slowly devised my plan.

I should say this isn't necessarily the right or best way to do things but for me it was a way to get involved and start to learn. It was time to take action! I did the unthinkable and took a withdraw and loan on my 401k to fund my first buy and hold property. Everyone likes numbers so here they are mistakes and all:

4/2014 – First purchase

Property 1 SFR

Price 40k

Taxes 3000 / annual

Rent 1000

Insurance- 2200 /annual - Oops I didn't think to check flood plains

cash flow – 100 / monthly on a good month

Not a stellar investment by any means but it does cash flow and the home is very easy to manage with few issues...... so far, but I knew I could do better and the only way to do better was to fix this less than perfect investment with more less than perfect investments so I negotiated a deal to purchase 2 homes in a neighboring but run down town. Yes I was being a little sarcastic in my last sentance :)

I took out a 50k HELOC on deal 1 to purchase deal 2

7/2014 – Second purchase

Property 2 and 3

71k for 2 SFR homes

Taxes – 6000 / annually

Insurance – 1300 / annually

Rent – 2000 / monthly

cash flow – 400 / monthly on a good month

To sweeten this deal I was able to negotiate partial seller financing of 26k due in 15 months from closing.

I have also just closed on my 4th property in 2014. This will be a decent rehab before it can become a flip or rental but more about that in another post.

The numbers for deal 3 are:

11/2014 – Third purchase

Property 4

20k for 1 SFR home

Taxes – 2200 / annually

Insurance – 400 / annually

Projected Rent – 1050 / monthly

Projected cash flow – 450 / monthly

So there you have it. . One year in the life of a new investor netting an infitite return on education and $500 monthly in cash flow. I am learning daily in this business and plan on scaling my business until I hit my magic number. Of course I wont be quitting my day job anytime soon.

This has been a fun, frustrating, sometimes stressful and rewarding journey to date and I am looking forward to more of these small successes in the future.

Thank you BP Community!