Goal of Post:
In writing this post I am hoping to inspire and provide actionable next steps for the many individuals I see like myself, who are recent college graduates with ambition over the moon, yet are strapped by lack of experience and capital to get started. Here is a big ol' CHEERS to you for kicking off your REI!

Investment Info:

Multi-Family Duplex currently being House Hacked in Minneapolis, MN

Purchase price: $265,000

Duplex was purchased in April of 2020, 8 months after graduating from college and relocating to Minneapolis, MN for my first job. Leveraging an FHA loan combined with a very competitive market forced me to pay $10k over asking price but ended up getting a final appraised value of $280k!

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

After my father completed his first BRRRR back in NY, I became inspired by REI and that power it can provide. After spending some time on BP, I determined that BRRRR would be very difficult for a first-time investor just getting started out of college. I ultimately landed on House-Hacking after realizing it would be the most actionable way for me to get started with my current financial situation/experience.

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

The first & BEST thing I did was find a KICK A$$ Agent in my local market with experience in REI and setting new buyers up in House Hacks. After crunching the numbers on a few MLS properties & conducting a few walk-through's, this property came up and hit all of the criteria I was looking for. Our original offer was actually shot down for another however, a few days later the accepted offer fell through and we were able to renegotiate. Ultimately we landed on paying slightly over closing (still worked with my numbers) and most importantly, getting seller paid closing costs which when combined with a State funded program (more to come), was one of they key factors for walking away from closing with keys & $400 cash in hand.

How did you finance this deal?

This deal was financed through a very standard 3.5% down FHA loan that I worked on with a local mortgage broker. The 2nd key factor in making this deal happen was leveraging a State Funded Down-Payment Assistance program which provided me with a loan for an additional $8,000 used to cover the balance of my cash to close that will live interest free through-out the life of the loan. This state funded loan combined with seller paid closing costs allowed me to close on this property entirely walking away with the keys and $400 cash from leftover credits.

How did you add value to the deal?

*Pictures Below*

One of the best parts about this deal was its true "good bones" nature with plenty of opportunity to add value through small DIY projects that allowed me to increase my repair knowledge at relatively low risk. All of these activities were performed by my girlfriend & myself with a bit of past experience, and TON of YouTube videos, and a 6-piece Dewalt Power-tool starter set (and a few other tools).We were able to perform tasks like repainting the apartment, adding a back-splash in the kitchen, and some outside work like small landscaping, removal of brush/overgrown areas, and a pergola for ourselves and tenants to enjoy. Coming up we plan to make the basement a more enjoyable place to do laundry (currently a dungeon) and eventually performing similar work on the upstairs unit once we roll-over tenants (inherited long-term tenants on a 2-year lease).

What was the outcome?

The outcome of this process has been acquiring a great "base-hit" property at true no-money down with plenty of potential to add value, fantastic inherited tenants, and solid cash flow potential once we move out and place tenants in our currently occupied unit. Above all the GREATEST OUTCOME has been the lessons we have learned along the way. Books & podcasts are important to gain a baseline understanding but you truly will learn the most after getting your first "tuition property" and the many lessons that come with the process which I will outline in the next section.

Lessons learned? Challenges?

1) Start your journey with a high-performing agent in your corner. My agent is truly the one who made this first deal come together and I can't say I would have made this happen without him working on my behalf. From showing the right properties, to pinpointing the right neighborhood, and finally negotiating the best deal possible catered to my current situation. All starting from just 1 text message sent on a Saturday afternoon.

2) PLEASE research first-time home buyer programs in your state. My father first told me about the program NY offered after I recently relocated to MN. I figured this was something specific to NY but turns out MN had an even better program that no one seemed to even know about (including my mortgage broker!). After a bunch of research and hesitation, I pursued this program and it ultimately became one of the key factors to making this deal happen and even better, getting paid at closing to do it.

3) Start analyzing deals NOW. I'm not going to lie, there are a ton of areas I got lucky on this deal including the appraised value coming in $15,000 over sale price and theoretically covering the $8,000 loan I owe to MN at time of sale or refinance. I could have easily ended up $8,000 additional in the hole and you can bet I am taking the time to use BP calculators & analyzing home sale prices in my area to set myself up for future success when luck is not in my corner.

What is next for me? (This is not a section of the template but often a question I have when reading similar posts form others)

1) Leveraging current times to educate myself for future deals. At minimum I would like to follow a similar process to purchase my next property once my homestead requirement of 1 year is up. The only difference? This time around I plan to have much stronger deal analysis skills as well as better knowledge of neighborhoods in my area, where are the strong deals coming from, etc. In daily practice I currently wake up each day before work, listen to a podcast/webinar, and analyze at least two deals either in MN or NY (where I have family to potentially help me invest remote).

2) Networking/Sharing my plan/Finding partners? My hope is to continue sharing this story and learning the stories of how other both in my area and on BP have found success through REI. The idea is that I can find inspiration to drive future investing strategies and who knows! Maybe a partner to invest in a home run deal I find through my daily property analysis.

Hope this has been helpful for some of you, feel free to reach out with any question!

-Brett