All Forum Posts by: Branden Pfaff

I am sure that some may disagree with me, but as a newbie in real estate (like myself), I wouldn't invest out of state as one of my first deals. It takes time to build effective teams and get a working knowledge of REI. All of which will change in each area. I'd urge you to stick local for your first few deals.

@Benjamin Aaker Thanks! I appreciate it! Do you currently own any rentals in the area?

Into a house hack for no money down?

It was my wife and I’s goal, and now we achieved it (courtesy of the Midwest and bigger pockets)!!!

Residents in South Dakota that are recent graduates get a 5% grant on homes up to $250k - covering all of the 3.5% DP. To the make the most of this grant, we wanted to use it to get into a duplex to house hack.

We are closing at the end of the month and here are the numbers (keep in mind our end goal was to start slowly into real estate and gain experience, we are not planning to scale quickly at this point).

Property Type: Duplex

Purchase price: $217k

All Closing costs paid by seller: $7k

5 year Home warranty to cover all appliances, AC, Furnaces (paid by seller): $4k

Our 5% grant: $10.5K

So we are into the property with $600 out of pocket for an inspection.

Comps put the duplex between 225-235k.

Exit strategy: Live with minimal expenses in the duplex for 3-5 years then Refi to conventional. If rates stay close to where they are, we should be close to the 50% rule after Refi. 

Like I said - we aren’t going to stand a great profit from this deal, but we will be paying less than half the rent of a comparable appt in our city, while gaining equity (and experience!!).

Biggest lesson I’ve learned from this deal thus far is having a good team. In this instance I had my realtor that was working hard to find off market deals, as well as a mortgage lender that knew the best financing options for me.

We are excited to get going.

Thanks to BP for encouraging us to take that first step. 

Hey BP, As way of introduction: I’ve been interested in REI for quite some time now, but never had the knowledge to step forward with it. I feel that BP has given me the confidence to seek out my first deal. I’m amazed and thankful for the wealth of knowledge on this site. The property that I am looking at is a SFH 800 sq ft. The exterior is rough and it’s been vacant for 2 years (the owner is old and annoyed of crappy tenants). The house doesn’t need much besides a roof, siding, paint, and some kitchen cabinets. A realtor friend told me that he has sold 2 similar homes in the neighborhood for over their asking price (~100k), in under 24hrs. Contractor estimates 15-20k in repairs and the neighbor will sell for 50k. It’s in an improving area of town as well. Anyone want to help a newbie analyze this deal? Estimates on closing costs, realtor fees, any other expenses to consider? Wanting to flip. Branden

Hey BP, As way of introduction: I’ve been interested in REI for quite some time now, but never had the knowledge to step forward with it. I feel that BP has given me the confidence to seek out my first deal. I’m amazed and thankful for the wealth of knowledge on this site. The property that I am looking at is a SFH 800 sq ft. The exterior is rough and it’s been vacant for 2 years (the owner is old and annoyed of crappy tenants). The house doesn’t need much besides a roof, siding, paint, and some kitchen cabinets. A realtor friend told me that he has sold 2 similar homes in the neighborhood for over their asking price (~100k), in under 24hrs. Contractor estimates 15-20k in repairs and the neighbor will sell for 50k. It’s in an improving area of town as well. Anyone want to help a newbie analyze this deal? Looking to flip. Branden