First Investment HOME

[Scott Brewster]

Investment Info:

Single-family residence buy & hold investment in Spokane.

Purchase price: $203,000
Cash invested: $115,000

Had a couple investment houses, but this is my first investment home. I sold both properties in VA and paid for almost have of this up front and remodeled it with the rest of my savings.

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

I moved to the West coast because I saw that Spokane county was exploding with real estate prices. I started to get discouraged because it was getting impossible to find a decent priced home in my price range of 215k or less. The market was extremely competitive so I had to act quickly.

I wanted a home that I was going to pay off so that I had the freedom to retire young once I figured out how to get some passive income going. I love this area and absolutely love this house so I am making it how I want it. It's my corporate office and my safe haven for when I need to get away from everything else. Next is to learn how to get some wholesaling down and transition back home so I don't have to live out of the country anymore just to make a decent wage as a mechanic.

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

I scoured MLS for weeks when I moved to Spokane and saw a handful of properties that I actually wanted. This house was in terrible shape on the inside but it was all cosmetic. The owners and renters never gave a damn about this house but I saw its potential so I made a very competitive offer myself. I paid asking price of 205,000 and I'll cover my own closing costs. Even with the perfect sell like that the seller was still extremely difficult to deal with.

How did you finance this deal?

VA loan, sold both of my investment properties in Virginia and combined with my savings before I got out of the Navy was able to pay for almost half of this house in cash.

How did you add value to the deal?

There was a ton of work that needed to get done on this house so that the VA appraiser would approve, the seller was NOT happy but I was able to knock 2,000$ off the asking price. The seller was a royal pain in my behind but I got what I wanted.

What was the outcome?

I closed on the house in late August and with my full time 50 hour a week job had to commute an hour in either direction from where I was living to where I was working and this house but was able to get the bottom floor gutted and renovated in about 3 weeks flat. I was on a tight time line because I picked up a job out of the country and needed to get at least the bottom floor livable. I now currently have a friend watching the house for me while I work out of the country. Thank god for him.

I've since paid off the house entirely and I'm still working out of the country to fund the rest of the remodel. The house is already appraised over 300k and I've only owned it for 2 years. Just astounding how the market out west is. 

Lessons learned? Challenges?

Biggest challenge for me was the seller and my time crunch. I offered the seller asking price AND to pay my own closing costs. He made me jump through hoops, missed appointments, ignored our calls, and even left the state on the day of closing. This guy was a real piece of work.

On top of that the biggest challenge was funding to get the bottom floor livable in just a few weeks. I dumped so much money into the down payment that I only had so much left to work with before I left the country.

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

Yes I did, pm me for details. She was a lot of fun to work with and was very supportive through all the difficult things the seller was causing.

[Teagan Brown]

@Scott Brewster Great work being persistent and diligent! Seems like though there were some bumps it's paying off. What's your plan next for getting into wholesaling?

[John Stewart]

This is awesome! way to go, especially in Spokane!!! Impressive

[Carter Bastian]

Well done, @Scott Brewster! I'm jumping into a search for my first rental-property here in Spokane, and I can whole-heartedly confirm that the market feels great for sellers and tough to break into as a buyer!

[Robert Kincaid]

Scott,

Good on you for making it happen out here! I am from Spokane, born and raised, and over the last 5 years the price of entry in Spokane has risen astronomically. I purchased my first home here in 2013 for $105,000 - sold it for $189,000 last November. When I was initially shopping for homes there was an incredible number of homes available under $100,000, even well below $50,000, that were livable homes with cosmetic issues. Finding homes under the $200,000 mark is becoming a challenge and the market certainly favors the seller right now.

[Evan Keturakat]

Great work on this deal, I can tell you will have many more. Keep it up!

[Scott Brewster]

@Evan Keturakat Thank you! I'm hoping to make some big moves early next year and push into multi family investments!

@Robert Kincaid I hear you brother! I was researching Spokane in 2016 while planning my move there and by 2018 the housing prices were astronomical! That's exactly why I jumped on this property. She needed a lot of work but there was no where else I'd ever find a 2800sqft home for less than 250k again! I'm going to start a mailing campaign next year to see if I can find some off market deals, the market in Spokane is absolutely on fire right now and I wish it would slow down!

@Carter Bastian Thank you! Good luck man! The market is insane right now and I'm having trouble finding homes at market value that can rent with cash flow since wages in Spokane are still lower than average it's going to be difficult unless you get a killer off market deal. Keep me posted I'd love to see what you get into!

@John Stewart Thank you! I was watching this market for 2 years before I was able to move to Spokane and was very nervous when I finally made the move and realized that prices have gone up so much, I'm glad I found this house for so low. The seller was a big pain in the *** BUT I got it! haha.

@Teagan Brown Thank you! It was one of the hardest purchases I've had to date but it was worth it. Picked up a job out of the country for the time being and did pay it off! Still funding the full remodel though. My next plan is to attempt a remote flip or BRRRR while I'm overseas. I figure if I can complete one deal from here, that there is no reason for me to be here anymore!