Howdy,
My name is Jacob Bopst. So, it's 2015, I'm this 21 year old punk kid still living at my parents, and I've never done a real estate deal in my life. I just got done reading the book, "Nothing Down for the 2000's" by Robert Allen and I am feeling bold (reading books usually does this to me.) At the time I worked for my Dad at a landscaping supply store selling rocks, mulch, and dirt. It was a new business so I had a lot of down time. I spent the majority of that time looking on Zillow for real estate. I happened to stumble across something that looked like deal(at that time what did I know?) It was listed for $99,999.00, Rancher, 4b 3b on 1/2 an acre, built in 1999. These numbers alone is what caught my attention I thought a house like that would sell for about $200,000. It was on the market a long time and I was curious why it hasn't sold yet. After inspecting the property I soon found out why. First of all, it was an awful color scheme and the exterior was hideous (see attached.) Had green carpet and pink walls( a lot of holes in those walls) and needed new bathrooms. Still it was worth it, the worst factor I later discovered is there was a large crack in the foundation scaring people off. For a naive 21 year old boy? Nope, I bought it, at a discount too, $79,900.00. How though? I barely made 23k a year at my job and for this deal it needed to be cash or 203k loan(rehab fix up loan.) After reading that book by Robert Allen, I called everyone I knew family, friends, neighbors, anyone with a pulse and begged for money. I was able to raise the money for the house and repairs a total of $90,000.00. I would give them a 12% return on their money and guaranteed I pay them back in a years time. I bought the property, replaced exterior doors, did some plumbing, installed new wood vinyl flooring(cheap but so beautiful), new bathroom floor tile and sinks, drywall patching work, closed off ugly carport to make a 2 car garage, patched up the cracks in the foundation, and a whole lot of paint. I got the property appraised and it appraised for $210,000.00! I had just enough income from my job to do a cash out refinance for $110,000.00(I mean it was so close, like to the penny, that was so scary) I pulled the cash out and payed out my investors at the end of years time just like promised. I did it! I just recently did another refinance not too long ago and my property was appraised at $255,000.00! I did put about another $5,000 into it through the years, but still! What a great return for my money.
So in the end here is the summary of my first real estate deal. $79,000 bought, $90,000 private money loan, $5,000 closing costs, $6,000 in repairs(a lot of sweat equity here, I did pretty much everything, thank you youtube), Cash out refinance for $110,000, pay investors back with 12% return $100,800, $9,200 bonus money left over, house appraised for $210,000 so $100,000 in equity, stupid appreciation over the next 4 years with minor $5,000 worth of improvements house is now appraised at $255,000. House cost me $105,800 after paying investors and putting in $5,000 out of my own pocket over 4 years is now worth $255,000 leaving me with $149,200 in positive net worth with no money down upfront. This is what got me hooked on real estate. Later I learned that the phrase Brandon Turner coined as the BRRR strategy is exactly what I did, and boy did it work wonders. I have it rented now and it is cash-flowing nicely.
I hope you found this inspiring and helpful. The whole reason I wrote this was to inspire someone to take action. Feel free to message me anytime if you have any questions about this deal I would be happy to provide any information I can. The whole point of this post was to let you know you can do this too! If a stupid 21 year old can, you definitely can. Good luck house hunting, wishing you much love and success.
-Jacob Bopst
