Closed on my First Deal!!

[Mike Mead]

So I finally competed my first deal!

Since finding BP 3 years ago, I knew I would start a business in Real Estate at some point. At the time I didn’t have any money saved up and all I had was time. So I put a plan together to save up enough for a down payment. In the meantime, I did nothing but read books, listen to audiobooks, and listen to Podcasts.

I feel a big part of my success was because of BP so it’s only right that I share the details of my first deal. I had been looking at several properties in the NC area and found a Duplex for sale. It was 3 beds 2 baths on both sides and built in 2008. It was listed for sale at $169,000 and had renters in place bringing in $1500.00 per month. Home appraised for (179K)

$750 per side was about the average rent for this part of NC. I had analyzed countless properties in the area so I felt comfortable with that amount being collected. After some further research, I found out that it was an estate sale. I then looked at the public record to see if they had refinanced the property at all and didn’t find anything. I determined that they owed about 85K on the property.

From this point, I thought  a good opening bid would be $125K. They declined, and after brief negotiations we settled on $132K.

(Disclaimer) I know I may have made some mistakes but I’m willing to work through them.

Rent Collected $1500

Mortgage -$675

Property Management -$150

Vacancy -$75

Repairs -$75

Liability Insurance -$27

HVAC -$25

Roof -$35

Cash Flow $438 per month

20% Down Payment $26,400

30 year terms

Cash Flow Yield 19% (438 x 12 = 5,256/26,400)

ROI 22%

Note: When they countered to 145K, I got some great advise from @Michael Lee to tell then why I was offering a lower price and give my reasoning... IT WORKED!!  Thank you Michael for your help. 

I'm officially off the sidelines!

If anyone would have handled this differently, I would love to know.

Thanks

[Ted Vu]

nice job and thank you for sharing your first deal. I'm in the same boat as you 3 years ago. I'm now thinking about investing in about 2-3 years. While I save up my funds I'll be spending a lot of time here, listening to podcasts and reading books. I hope you have many more successful deals in the near future.