8 Months Later

[Mark Douglas]

Nashville, TN is super competitive right now, so prices are really inflated, making it hard to find something that makes sense. I've been waiting about 8 months to post here, but I finally closed on my first property! Owner-occupied FHA duplex, with a Section 8 tenant in unit B. 2bd/1ba units. 80% of the rent is paid by S8, and the remainder is paid by another program that pays the tenants' monthly bills - sort of a money management/budgeting program. But 100% guaranteed rent each month! (Oh, and the tenant in unit B has been there for 6 years!)

The numbers:

Purchase price - $95k @ 3.875% 30-yr fixed

Cost to close - $3,325 (3.5% down) + $1,500 (my portion of standard closing costs..the asking price was $114k but the appraisal came back at $95k, so the seller was not paying a penny in CC, which is understandable..the bank paid the rest of CC) + $200 home inspection and $45 termite inspection

All in cost to close - $5,070.00

Mortgage (PITI) - $735.08

Rent from unit B - $680.00

My living expense - $55.00

Definitely still need to factor vacancy, PM (I'll self-manage for now, until I build up a portfolio large enough to justify hiring out management) and miscellaneous expenses, but it's not a bad start. Also, when I move out, the numbers will only improve. I'll start the new tenant at $750 or $800.

I'll have to put about $6k in repairs upfront, due to previously deferred maintenance, but I'm hoping it'll just be routine upkeep after that. Plus, I have some breathing room in my budget for repairs, now that my living expense went from $750/mo (my last apt rent for a 1bd/1ba) to $55/mo! I'm requesting a rent increase from S8, to $800/mo to help offset the cost of repairs, but even if they deny the request, I'm still coming out way better than I was when I was renting :)

I'm 23, and was pretty nervous about taking the plunge. The forums, podcasts, and actually meeting with a couple BP members in person for coffee and conversation really helped me to realize that it's possible.

One thing I've learned through this - don't just pull the trigger on a property because you're tired/frustrated with your current situation. An impulse buy is fine if you're at the drive-thru, but it's no way to buy real estate! It's better to hold out until you find something that meets your criteria - even if it takes 8 lonnnng months.

I know I still have a ton to learn, but at least I can learn pretty much rent free, if nothing else. I will definitely keep asking questions on the forums haha

Thanks so much :)