I'm really excited about some news I got yesterday and wanted to share. After about 8 months of immersing myself in REI books, podcasts, and of course the BP collective wisdom, I found my first rental property deal. It's a SFR, 4BR 1.5 BA in an inner-ring Milwaukee suburb. It was really a perfect first purchase: it had been very well-maintained (including an over-the-top foundation repair), but needed a cosmetic update. It sat on MLS for a long time, and on the 3rd price drop we jumped on it. We closed in September, and some great tenants moved in on November 1.

The rehab was simple: new cabinets, LVP flooring, granite, and SS appliances in the kitchen. Refinished hardwoods throughout. Replaced all fixtures. Fresh paint throughout.

Here are the purchase & cash-flow numbers:

Purchase: $111,900
All-in cash: $38,021 ($23k to close, $15k rehab)
PITI: $912/month
Rent: $1450/month
Cash-flow: $466 (after repair/capex set-asides)

I was hoping to refi with a valuation between $145-150k. Yesterday the appraisal came back at $163k! After closing expenses, I'll be getting $24k back out. I'll still have about $10k in the house, but making a nice 29% annual cash-on-cash return. With some partnerships I've formed in the past 6 months, I'll now be able to take this cash and buy TWO new properties! Needless to say I'm pretty stoked.

As all newbies hear early and often in their education, having a great mentor (or mentors), a great team, and a great network of other investors is all key to success. My agent @Marcus Auerbach has been amazing to work with -- smart, patient, wise, and truly invested in the success of his investor clients. The Brew City REI group, led by @Rebecca Holmes and @Nicole Pettis has been invaluable for getting advice and making connections.

Thanks to BP and this community for all you do, and for inspiring this guy to take the REI plunge!

Mike Lauer

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My first rental property: A BRRRR Success Story

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