This was an absolute nightmare! After listening to hundreds of bigger pockets podcasts and researching enough about real estate investing to be dangerous I finally pulled the trigger and purchased my first investment deal.

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

I was originally interested in using the BRRRR method so that I could scale and build passive cash flow to build long term wealth. But on this deal the rehab costs went way way over budget and I had to resort to trying to sell the property in order to cut my losses.

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

I found this deal on craigslist. It was listed by a wholesaler. I later found out after I closed that it had been wholesaled to the wholesaler so my margins were already thin to being with. I negotiated a purchase price of $45,000. ARV of the property was $96,000 which is what I sold it for 6 months later.

How did you finance this deal?

I used my own personal cash savings which later turned out to be a horrible idea. Because so many things went wrong with this property I was down to my last few dollars before this deal finally sold. Had one more thing went wrong I would've had no way to pay for it and it was incredibly stressful. For my future deals I always use OPM (Other People's Money)! This allows me to have my personal cash savings as an emergency fund incase something happens and I need it.

How did you add value to the deal?

This property needed a complete rehab. It was a 50 year old home that had mostly original construction inside and out. The plan was to update it, rent it out, refinance it and repeat the process (the BRRRR method). The wholesaler told me the estimated rehab costs were $20,000. To be safe I estimated about $25,000. The problem was that the actual costs to fix up the property ended up being around $50,000.

What was the outcome?

The outcome was not what I had expected. I had to change exit strategies to cut my losses and sell. When I purchased the property it was vacant and the utilities were off. I had my home inspector inspect the property but with the power, water and gas shut off there wasn't too much he would've been able to uncover. This I didn't realize until it was too late. Every problem you can think of came up in this house from foundation problems to electrical and plumbing it all had to go.

Lessons learned? Challenges?

Looking back on my first deal I got a PhD in real estate investing. I lost around $5000. Which at the time felt absolutely terrible, I remember the day I found out about the foundation problems I literally wept at the property thinking I was a total failure. But now the money lost seems like a bargain for the education gained. Since this deal I was able to push forward to acquire over a dozen BRRRR rental properties enabling me to escaping my corporate job.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The biggest mistake I made on this deal was not getting any help. I thought I could do everything myself. That's why I became focused as a real estate agent to help others succeed. I created My Agent Investor to give people access to investor friendly agents that can help them avoid all of the mistakes that I made on my first deal. We have a team of agents that can help you with everything from figuring out cash flow on rentals, estimating repairs, to negotiating great on or off market deals.