My First Deal:Was it My Best or Worst?

If you look back at my previous post you'll know that I had a severe case of the dreaded analysis paralysis...but with the help of my amazing wife and digging deep for my why I was able to be cured! This is about how sometimes the cure can be painful, amazing, scary and freeing all at the same time.

So after I decided to be an action taker instead of a spectator, I found a deal, in under 2 weeks! Like a sign from above I hopped onto Craigslist searched investment property in the real estate category and halfway down page 1 there it was staring straight at me. So like the new action taker that I was now I called the wholesaler up and asked to see the property. It was in an area I knew merely a few blocks from the firehouse I worked at so I met him there after work. It was beautiful, Overgrown yard, out of control bushes, dingy windows, a roof in need of repair, sagging floors, Crazy painted walls, nasty bathroom, busted kitchen cabinets, low ceilings, crooked doors, broken cellar windows, filled with junk, and probably much more. 

"Like a sign from above"

Oh how I wish that I had been able to identify all that then...or maybe I'm glad I couldn't, if I had I probably would not have gone through with the purchase. Who knows maybe I would have said it can't be done and just quit on REI altogether. I noticed about 1/3 of the issues with that first house, so I was able to negotiate the price down 5k from 40k to 35, and I thought I was Chris Voss with my negotiation skills! psyche I probably paid twice as much if not more than what I should have. After closing, I had some contractors walk through it with me and that's when I got the laundry list of issues, I was terrified, but determined since I'd already made the jump, so I started to build my parachute.

I called contractors asked for references, and learned how to do different handyman jobs. It seemed like every contractor I got in there saw more issues, it was disheartening, I used a lot of the cheapest contractors I could find to do jobs for me...not a great choice on my part. You get what you pay for. I ended up having to get jobs redone, doing more stuff myself, and watching my rehab loan grow and grow getting closer to the limit. This was easily one of the most stressful times in my life, it kept me up at night many times. What I thought was going to be a homerun, that would show the world I was genius expert RE investor was turning into a nightmare. Floors had to be jacked, and rafters had to be replaced, there was easily 15k in unanticipated expenses...and everything took longer than anticipated. 

Finally the end was near and it was all wrapping up. This was the ultimate test...would I be able to pull off a BRRRR that I'd studied so hard in so many books/podcasts/webinars for so many years? And even if I did would I cashflow with the mortgage payment? I talked with the bank which was willing to give me long term debt without a seasoning period it just had to appraise right. Luckily for me I got the appraisal that I desperately needed right in time before my rehab loan ballooned! I wasn't able to pull every penny out...but almost just a few thousand left in I even cashflowed just a little bit. Since then I've had multiple deals, and they have all been full BRRRRs where I can even pull money and cashflow hundreds of dollars a door after expenses. 

So was my first deal my worst deal or my best? the answer is simply Yes. On paper it is easily my worst deal I've ever attempted with the least quality work. Every other property rehab has run smoother and looked better. But in practice my first deal did a lot of great things for me:

1. Turned me into an ACTION TAKER!

2. Gave me the experience and confidence I needed to do every other deal.

3. Opened my eyes to the skills I'm naturally good at.(Being a GC, a Sub, or hands on are not in my skillset)

4. Even cashflowed for me and has since appreciated(like everything)

So in the end I would never trade that deal or experience. I wouldn't do it now, but I wouldn't be in the game now if it weren't for that deal. Good luck to everyone getting started and if there's anyway I can help out feel free to reach out!