Our first two deals closed in months time...kind of

[Damir Kamber]

Hello BP addicts!

I have been absent for probably a month, this daddy thing is no joke ;) 

I don't care what others will say, we just closed two deals in two (and some change) months time. We bought a SFH on May 24th and sold our condo on August 1st. Pretty unique story I'm about to share, I think it's worth going into the 'success story' archives :)

We bought our condo in Old Fourth Ward, Atlanta back in 2010, lived there for three years and have been renting it for three more after that. One thing we did not do, probably most important when it comes to REI. We did not buy right. 2010 was probably the tail end of amazing prices after the 2008 circus, yet we overpaid 20-30K. Why? Simple...we had no idea what we were doing. The only thing we knew was that we wanted to live in the city. Fair enough I guess, if you want to live that lifestyle at age 26 and get it out of your system. Probably best 3 years of our pre-kids time spent together. ('We' I am referring to is my life partner, @Aida Kamber).

What did we learn at this point? Get educated before you continue. After we moved to the 'burbs, Roswell to be exact, I started to think more about where this daily repetitive routine is leading and what we want to accomplish 20 years from now. I was working in the restaurant industry at the time where I was continuously meeting people who 'didn't go to work every day.' The more questions I asked, the more answers I got. Boom! Passive income. 4 Hour Work Week. Real Estate Investing. 

Next up...Than Merrill! Who?! Mr. Guru himself. I went to the free 2 hour seminar and spent $200 for the 3-day "boot camp." Best $200 I have ever spent. At this point, my wife thinks I'm out of my mind. "This is a scam! I can't believe you just paid $200 for this." Her Google Ad words skills had every complaint about these so called 'educators' pulled up on her phone. Like I said, best $200 I have ever spent! 

This was spring of 2015 and at this point we both decided we want to free up our time and not have to go to work every single day. Goal was to buy an investment property by the end of 2015. We did not achieve that goal. What we did achieve is the education part which we lacked five years prior. By the end of 2015, we had financing, attorney and accountant pieces of the puzzle ready to go. Doesn't seem like much, but any quality investor will tell you that those 3 things are your foundation. And as we all know, you cannot build a house without laying down the foundation first. 

Now that you know how we got here, it's time to get to the nuts and bolts of this thing. The numbers! Let's start with the condo. We purchased it for 167K in 2010, lived in it for three years, rented it for $1,540/mo the following three. After mortgage and association fees, we were making $40/month. This supports the fact that we did not buy this one right. The good part about renting a condo, you don't have to deal with major repairs. We spent $545 for repairs in the six year ownership period and the association increased $150/month in those six years time. We sold the condo earlier this week for 189K and walked away with 29K in our pocket. Lesson learned: Do not rely on depreciation, treat it as a bonus. We got lucky and our condo appreciated therefore we were able to make a profit. 

Finally, our SFH in Snellville, GA. Purchase price $95K, rehab 25K, down payment 20%, closing/agent/holding costs 10,362, on the market for rent $1,350. We finally bought right! Thanks to cheap money in this recession bound market, we are able to cash flow little over $700/month. We have also been educating ourselves about rent to own option and it sounds like a grand slam in this situation. Check out https://www.biggerpockets.com/renewsblog/2016/07/2... if you are interested in learning more about this niche. 

Cheers,

Damir