My 1st Deal In Real Estate

[Kyle Smith]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Loveland.

Purchase price: $405,000
Cash invested: $20,000

I'm an owner occupancy in a duplex close to my executive job at a nationally ranked marketing agency. This is my first of many deals to reach $10K monthly cash flow from my property.

What made you interested in investing in this type of deal?

I'm a buy and hold investor in real estate. I believe fix/flips are too risky for my current levels of risk tolerance and long term goal horizon. I want to use property as an income vehicle rather than a big pay day (sale of a business/asset).

How did you find this deal and how did you negotiate it?

I worked for free as an intern for a local real estate and investments firm. The owner liked me so much I got a job offer but declined as I also had an opportunity to start a technology career, and choose that. A few years later after I saved up enough liquid capital, became more educated, and had consistency in my pay, I tagged up with the owner and he acted as my broker.
I plan to used this broker moving forward - he advises from the heart and mind rather than self interests.

How did you finance this deal?

An FHA 30 year fixed loan. Only did 3.5% down, which I viewed as leverage.

I think you should buy properties outright with a buy and hold strategy, but I'm just getting started!

How did you add value to the deal?

I negotiated a lower purchase priced after a wisely invested property inspection. I also built my relationship with my broker leaving a positive review for his business and rapport building through met ups, phone calls, emails.

What was the outcome?

I'm living on one side with a roommate to save even more cash. I have a tenant on the other side who is a great tenant. Truly having great tenants is a critial operational point to get right when it comes to real estate.

Lessons learned? Challenges?

Backyards are nice to have if you have a dog.
Appliances break - have an emergnecy fund to cover such expenses and contribute to this fund every month.
Good marketing and tenant screening skills will save you time, money, headache.