All Forum Posts by: Eric Costa

Hey all, 

I just wanted to add an update on the progress.  This ended up turning into a Flip.  Working on the weekends I Spent a total of 27 days, over about 3.5 months.  Then i was approached by a local realtor who had seen some work and was selling in the area.  I received an offer of within 8 hours, and sold the property for $195,000.  I put in $32,000 and came out with nice little profit.  Below are some of the pictures.  

Hey all,

I wanted to share my first investment with you all.  I've been a BP member since July '18.  That was when I was truly introduced to RE investing.  After taking in all of the podcasts and buying/reading the books i finally knew how to get started as an investor.  Prior to finding BP I was a typical spender; buying whatever, whenever.  Thanks to BP I had finally realized a goal that I wanted to achieve and how to do so.  If I have any advice to anyone looking to get into RE investing - GET YOUR FINANCES IN ORDER.  Budgeting and putting my money away with a goal in mind made my job have a purpose.  

For 2 years I focused on getting my debt under control.  Saving money and paying off students loans until they were manageable. I thought the outlandish $1,200 a month payment was going to stay with me forever.  Now those loans are scheduled to be fully paid off in just under 5 years.  

Over that time frame,  I would analyse properties of all different types, in a myriad of locations.  Slowly learning the ideas behind what makes a good investment.  I was completely overwhelmed though.  I didn't know where to buy, or how much money I needed.  AND then it happened...

I was looking through Trulia and found a condo in a complex that I recognized.  It was in the town i grew up, I also knew a real estate agent that works in that exact area.  After confirming with my agent, the numbers worked.  Listed at $115,000 the same exact unit just sold two weeks prior for $165,000.  It needed some work including new floors, kitchen cabinets, and a new bathroom.  I decided to put an offer in at $100,000 which got accepted!  

The property is about an hour outside of NYC. It is a 3 bedroom, 2 bath condo. HOA fees are 285$ and the association is in good financial standing. The same unit fixed up is averaging $1550/month in rent. Using a conventional 30 year mortgage and putting 20% down I'm looking at roughly $1050 in operating costs per month.

I built my team, without even knowing it.  My agent was able to reaffirm the costs, and negotiate the buyers down $15,000 (a little less then my reno budget).  My mortgage broker helped negotiate seller concessions to pay for closing costs so I'd have less out of pocket expenses.  My Attorney was a recommendation from my agent, they have been budget friendly and extremely helpful.  The Inspectors and appraisers have also been great people.  I've learned that just having 1 or 2 great people on your side will help bring in other great people as well.  They wouldn't want to work with bad inspectors, or attorneys.  

Closing is scheduled for February 11th, 2019.  I'm going to be doing some renovations and I will post some more information with actual finished numbers in the future.   

Thank again BP. Here's to helping me make it finally happen.  

Great! thanks for putting this together, see you on monday.

@Todd Dexheimer Thanks for the reply.  After some consideration, I believe I'll be following the same path you did.  I didn't realize all the complications involved in starting a fund like that.  So to begin, I'll do doing a Hard money loan, and i'll use a  partner/my own funds for the required down payments.    

@Brian Burke The man himself!  I had to go back and listen to your podcast.  It makes plenty of sense what you are saying.  I should really get a solid foundation before i start trying to put together fund like that.  I'm going to go down the hard money route to begin. Since this post I've contacted a couple HM lenders and we're working out details. Thanks for replying, I appreciate the insight.  It helped push me in the right direction.

@Cara Lonsdale Thanks for the reply.  I believe you are correct, syndication may not be the best way to start.

@Uriah D. it seems like that is probably the best way to get the ball rolling. Thanks for the advice.  

This question is for the professional home Flippers out there in BP land. If any of you wouldn't mind sharing some details, I would greatly appreciate it!

I'm starting a Flipping company with my cousin.  We will be the general partners, and we've approached our family, close friends and co workers as investors.  Maybe one or two of these people are accredited investors.  I do have a meeting schedule with an attorney, I'd like to be prepared with some knowledge before I waste my money and his time.

1.)Is this a legal practice that we can do? I remember an early podcast where a police officer/Firefighter opened an investment trust, is this still a viable option?

2.)How are these deals generally structured?  All of the investors will be bringing in different amounts.  We're looking to build a fund of 300-400,000 for our first house flip. (Northern NJ - that's 1, maybe 2 houses).  Is it beneficial to make this a 2-3 year investment, or should we base it on per house? I've seen that returns are usually 8-12% for private investors.  

3.) On top of the monetary investment I will be making,  what do you add on top of the deal for managment fees, etc.?

Thanks for reading and/or replying.  Any additional information would be great too!

@Ryan Ingram I've been pounding away at all the good titles, my book shelf looks like a self help library.  Ill have to check out Millionaire next door.  I think i tackled most of the fundamental ones, Napoleon Hill, Stephan Covey, Hal Elrod.  If I've gotten nothing else from BP its at least shared some good literature!

@Odie Ayaga @Vincent Priore @Kerry Mertz  Good points, I do believe I have my broad stroke goals in mind.  It is, however, hard to say what the actual concrete numbers should be considering my knowledge isn't too expansive at the moment.  I will house hack,  and I believe I want to get a 4-unit MF.  As i'm sure all of you know, the taxes are insane in this area.  It doesn't seem like 1,2, or even 3 units can cash flow with out an INSANE deal.  I would be willing to spend all of the amount the lender is willing if the numbers worked out.

@Alexander Felice @Kelley Gabany  I agree, I could be doing more networking.  I have reached out to some groups in my area, but no luck so far.  I will continue to do so, this is probably the most important step now that i think about it.  Thanks for your advice.