2 years after discovering this site i finally have my first deal

12 Replies

After two years of BP homework I'm very happy, relieved even, to have acquired my first buy and hold single family residential home in McKinney, tx. I picked it up from a dallas area wholesaler, networth realty, who was great to work with.  It's basiaclly a turnkey buy and hold because no repairs are required and there are 4.5 years left of lease left with a current tenant.  The monthly numbers aren't great, right at 1% rent to purchase price, but I did gain 40k in equity at close, paying 130 cash with a 170arv.  The area has been appreciating rapidly as well so hopefull we'll see values over 200 within next 5 years. And, the tenant is a handyman who has already begun improving the property by refinishing the cabinets and building a nice deck. All in all it works for me.   Now I plan to do a cash out refi and get busy buyin another property or two.  

Happy investing!

Kyle McNeil

Congratulations @Kyle McNeil . It sounds like a nice house in a nice area. Why don't you give us some numbers on how it cash flows and how you knew the value of the ARV?

thanks Jerry,  for the arv I pulled 5 sold comps in same neighborhood ranged from 167 - 176k and did a few puts and takes as some didn't have a garage (my property has 2 car detached) others were  more updated.  For the cash flow I paid cash so it's around 1k month after insurance and taxes.  I do plan to cash out refi on 30 year fixed which should put me around 300/month CF. 

This post has been removed.

Congrats on your first deal @Kyle McNeil . Make sure you account for all the costs such as cap ex, repairs, vacancy. The BP rental calculator has really helped me evaluate deals. 

Originally posted by @Kyle McNeil :

After two years of BP homework I'm very happy, relieved even, to have acquired my first buy and hold single family residential home in McKinney, tx. I picked it up from a dallas area wholesaler, networth realty, who was great to work with.  It's basiaclly a turnkey buy and hold because no repairs are required and there are 4.5 years left of lease left with a current tenant.  The monthly numbers aren't great, right at 1% rent to purchase price, but I did gain 40k in equity at close, paying 130 cash with a 170arv.  The area has been appreciating rapidly as well so hopefull we'll see values over 200 within next 5 years. And, the tenant is a handyman who has already begun improving the property by refinishing the cabinets and building a nice deck. All in all it works for me.   Now I plan to do a cash out refi and get busy buyin another property or two.  

Happy investing!

Kyle McNeil

Congratulations mate,

Commit to the numbers and there will be many more :)

Much success

@Kyle McNeil congrats sir! I can't wait to close my first. What neighborhoods were you looking in before you closed this one?

@Larry Fried - I thought it was unusual as well.  Evaluating assuming the lease was the toughest thing for me to think thru really.  The rental payments is about $150 / month under market but the gentleman that is leasing is showing pride in ownership and has added granite countertops, refinished the cabinets and built a deck.  So I'm thinking that the capital appreiation he will build for me will more than make up for the gap in market rent. 

@Kiel J. - I have been very selective in the areas I have considered, only looking within a 20 mile radius of my home in NW Frisco, and only in areas with great schools.  That means primarily I'm looking in Frisco, Allen, McKinney and Prosper with no real restrictions on any neighborhood in those communities.  Being from Grapevine, you well know that we are in the midst of a long period of high demand / low supply in my search area, so finding a decent deals can take quite sometime.  And, when you find a decent deal you can't hesitate to get a purchase agreement in place immediately or it will sell to someone else very quickly.   I missed out on 3 deals that I wanted because I didn't move fast enough, missing them by just a few hours or so. 

congratulations!! Half the battle is just to get started! Every subsequent deal we have done has been better than the first. Our biggest battle was just getting started

Congrats on your first deal!  Definitely an inspiring story, can't wait for my first!  

Congrats on your first deal.  Good deal flow is tough to come by in Houston as well; at least if you're honest to the numbers.  Good luck.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you