{"id":80980,"date":"2016-10-10T14:30:11","date_gmt":"2016-10-10T20:30:11","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=80980"},"modified":"2021-03-16T12:10:34","modified_gmt":"2021-03-16T18:10:34","slug":"575k-deal-five-months","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/575k-deal-five-months","title":{"rendered":"How I Made $575k From One Deal In Five Months — And How You Can, Too"},"content":{"rendered":"

It almost sounds like a cheesy tagline for a get-rich-quick real estate book from Eban Pagen. But it\u2019s true.<\/p>\n

I\u2019ll keep the cliches and platitudes to a minimum and get to the real reason you clicked the article in a second.<\/p>\n

But this is the gist of the story.<\/p>\n

Twenty-four\u00a0months ago, I was an undocumented immigrant with an expired student visa, stuck in green card processing hell. Today, my company owns about $5M of assets, with the first deal we did making us $575,000 in less than a year.<\/p>\n

What\u2019s so crazy is this: My story\u2019s not that special. It\u2019s not even uncommon. That\u2019s just the beauty of income-producing real estate.<\/p>\n

Why I Did it<\/h2>\n

Basically, I was working 12-14 hour days, grossly underpaid (of course), at a digital media startup on Wall Street, churning out articles on real estate.<\/p>\n

Now, I come from a real estate family, so investing in properties wasn\u2019t foreign to me. But doing it in America was.<\/p>\n

And I know you\u2019re probably thinking, \u201cYou got lucky!\u201d Or, \u201cYou found a great deal!\u201d<\/p>\n

No, not really.
\nI had a partner with a U.S. passport, equally excited the prospects of real estate investing. With a journalism background — amongst other things — I knew how to put together an article.<\/p>\n

\"invest-while-work-full-time\"<\/p>\n

The First Move<\/h2>\n

So I started writing about real estate in order to get to know the players. Then I went to an event, where I met a developer by the name of Michael Stern.<\/p>\n

(He\u2019s 36 and is building what will, momentarily, be the tallest building in the Western Hemisphere. He\u2019s pretty freakin\u2019 dope.)<\/p>\n

Related:<\/strong> At Age 26, I\u2019m on the Brink of Financial Freedom: Here\u2019s How I Did It<\/a><\/em><\/p>\n

We did a sit-down in his office about the state of the market and all the money flowing into U.S. real estate, the state of the market, blah blah blah…<\/p>\n

Directly in front of the window in his conference room was one of the other high rises he had built.<\/p>\n

After the interview, I cut off the phone recorder and asked him straight up, \u201cHow can I get one of those?\u201d<\/p>\n

Mortgage and Leverage<\/h2>\n

He then proceeded to tell me how he got started. \u201cMortgage and leverage,\u201d he said to me. \u201cGet a multifamily property<\/a>, leverage it, repeat the process.\u201d<\/p>\n

So I said, \u201cIf I find a deal, can I run them by you?\u201d<\/p>\n

\u201cOf course.\u201d<\/p>\n

So I did.<\/p>\n

I suggested a single-family, a condo, I think it was.<\/p>\n

He cringed. \u201cNo, no good.\u201d<\/p>\n

He suggested a three-family. So I set my sights on that.<\/p>\n

Of course, I’m not saying everyone needs a billionaire skyscraper building advisor; that\u2019s crazy. But there was nothing fancy about the advice — real estate investing 101.<\/p>\n

FHA is the newbie investor\u2019s best friend.<\/p>\n

Now, most of you, of course, know about\u00a0FHA loans<\/a>. Put down 3.5%, buy your first property.<\/p>\n

And with a three-family property, here\u2019s where you get to M&L like a motherlover; mortgage and leverage the heck out of the asset and start the foundation of wealth building.<\/p>\n

Buy a place with three units, rent out two to cover your mortgage payments, live in one rent-free.<\/p>\n

The Deal!<\/h2>\n

Being new to New York, both my partner and me, we decided it play it ultra-safe. Get a property in good shape, no rehab, no getting to know contractors — I know from personal experience how much of a nightmare that can be, even when the contractor is a family member! — no hassles.<\/p>\n

We were just looking for a nice vacant property that we could put up for rent immediately after closing.<\/p>\n

So we looked around, found a decent one not too far from Manhattan. (I\u2019ve written about the neighborhood here<\/a> and why you can find nice deals in this area.)<\/p>\n

Related:<\/strong> We Just Made 6 Figures in One Month \u2014 But That Means Nothing Unless\u2026<\/a><\/em><\/p>\n

It wasn\u2019t particularly cheap at the time. But it would be a nice, safe long play that would get us in the game.<\/p>\n

\"multifamily-benefits\"<\/p>\n

Income-Producing = Wealth<\/h2>\n

Now, in real estate, there are three different ways to appraise a property:<\/p>\n