Glad it worked out for you. all I’m saying is for a FIRST deal, that seems risky to ME. considering you put 5k down, and mortgaged the 100k, you likely had about 1000/month expenses (mort,pmi,insurance,prop tax,upkeep). Figuring 80% occupancy, you’d end up in the negative. And have 1000k to come up with to boot if you didnt rent it right away.
BUT, in the over all scheme of things, it looks like its working well fo ya! Kudos
Posted by JC IN Seattle on April 06, 2006 at 13:06:12:
I would really like to hear about how people got their first deal. It seems to me that getting that first deal is key in this business, because, before that point you don’t really know if this whole REI thing is really real. I would imagine people go through lots of emotioanl ups and downs on the road to that first deal. It would probably be really helpful to me and all the other newbies to hear some real stories from those who have made it over the initial hump of the first deal. Thanks in advance!
Every deal is still an emotional up and down. Enthusium when you buy. Aggravating when trying to rehab. Good feelings when finished. Gut wrenching waiting for a buyer.
My first deal was a 1/2 gutted. severly trashed 3 bedroom. Old house. Bought from a local bank for $2,900. Put about 10,000 in it. Worth about $35,000.00. Have it rented for $450.00/month.
My last deal. BOught a 3 bedroom 1 1/2 bath at an estate auction. $32,000. Rehab cost $8,000. Sold yesterday for $60,000. After closing costs I should net $15,000. The real joy in this is that We bought(closed) on the house on 3-21. Sold it on 4-6 with a close on the 26th. So 1 month & 5 days start to finish. My best yet.
Actually my first 4 deals came within weeks of each other. We negotiated with a bank for 2 4 unit apt bldgs on the same lot and were able to show them that at their asking price the numberts wouldn’t work. They agreed and we completed the deal in time to collect $3,000 in rent. We collected another $3,000 before our first payment was due. Shortly afterward, we flipped 3 properties within a 6 week timeframe and pocketed another $22,000. Not bad for beginners. I must say though, it was a year before we actually did these first deals as we met with a lot of “resistance”; but perseverance paid off and we’ve been doing this business for 14 years now.
I haven’t done my first deal, but I feel closer than ever. Let me just say that the emotional ups and downs are very true. Just keep punching through them.
Posted by Andy (TN) on April 07, 2006 at 10:42:43:
Arlanj,
Congrats on the quick turn-around time for your rehab. More volume is more cash and closing costs kill. I’m closing on an older house that’s about 1/2 trashed and needs closer to 15k in it because of hvac and pulling half the rotted roof off. I guess I’m looking for any ideas that reduced your time in rehab - pretty much anything you learned from your last effort to speed up the rehab process. I’m guessing you probably had more than 1 crew on the house at a time. Did you allow them to work during the night and other off-hours (weekend, etc.), if so, how’d you effectively manage them? How did you prevent delays because of materials? Did you get everything you thought you’d need yourself before the work started or did you have your contractor pick them up as needed?
After making the repairs myself (paint, light bulbs, add vent hood, etc.), it was on the market for 3 months before I got a tenant. Cashflows about $150/mo. Now worth $140,000+.
I guess your goal was to buy-n-hold? plus it looks like you had 20k equity to start with…that helps.
That deals a bit thin for me though, as I wouldnt want to plunk down 100k to have 20k in equity.
I just signed the papers for my first deal, and I’ll have 20k equity within 2-3 months (after repairs…much more extensive than your repairs!!), and will have only put 20k on the table. Plus, it’ll cash flow about 200-250/month.
But, I assume you’ll get better tenant!!! It’s all a trade off
Posted by Steve(TX) on April 07, 2006 at 07:29:39:
I didn’t “plonk down 100k to have 20k in equity.” I “plonked down” about $5k to have almost $30k in equity. Not the best deal I’ve done, but the OP was asking for “Your First Deal”, remember?