Finally Closed our First Deal!

Finally Closed our First Deal!

Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes

Finally Closed our First Deal!

It has been a little over two years since I stumbled across the BP Podcast and began the journey to purchase my first rental property, and while it took significantly longer than I originally expected it would, I am excited to say my three business partners and I officially closed on our first property today in Minneapolis, Minnesota!

So why did it take more than two years to close my first deal?

As I look back at the last two years there is no shortage of reasons or excuses I could come up with as to why it took this long for me to get my first deal done.  Everything from your classic case of analysis paralysis to fear of the unknown.  I consider myself to be analytical, something that I thought would be to my advantage as I looked to purchase my first rental property. I can build a spreadsheet with the best of them but like many people, I can also spend hours tweaking every line item, from rental income to vacancy rates, only to come to the same conclusion in the end…it might work.  I would worry that I might be missing some hidden costs or that I would not be able to get the desired rental rate.  Looking back on it now there were definitely a few deals that came across the table that I wish I would have jumped on but sometimes you need to learn the hard way.

So why did I finally close my first deal?

First and foremost, I found the right team of guys to work with.  We have a wide variety of backgrounds, everything from commercial lending, to working in the capital markets, to a having a real estate agent on the team.  However, and more importantly, we are all in alignment with what our end goal is and have a willingness and desire to work towards that goal together.  I could not be prouder of our execution once we found this property and I can’t wait to get our next.Secondly, I have to give credit to the BP Podcast for continuing to reinforce in me that real estate investing is truly something I want to do.

My advice to anyone sitting on the fence is to just go for it!You will never feel 100% comfortable going into your first deal, but trust yourself, trust your numbers, and treat it like one great learning experience.

One deal down, many more to come!

Always looking to connect with others in the MSP area to talk real estate!

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Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
8y

There are deals, you just have to be diligent and move quickly. Just closed on a SFH in South Minneapolis in the Kingfield neighborhood that is 3 bed/2 baths. l bought it for $165,000 putting in a $35,000 renovation (new roof, new kitchen, refinish flooring, paint, several new doors, upgrade heating system) so I'll be all in at $200,000. It's already rented for $1800/month starting Sept 1st so I'll cash flow while waiting to sell after a year and a day to get long term capital gain status. ARV is $260-$275,000.

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  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    8y

    Congrats Brenton!

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    Thanks @Richard Di Giulio!  You just have to dive in and go for it.  I think I have learned more diving in and just doing this deal than I have in the two years leading up to this deal.

  • Charlotte, NC · Member since 2016 · 82 posts · 41 votes
    8y
    @Brenton Braddock Thanks for sharing!! I’m also looking to buy my first one... hoping it will happen this year!
  • Rental Property Investor · Los Angeles, CA · Member since 2011 · 122 posts · 67 votes
    8y

    Congrats @Account Closed ! After the first deal, the next deal will follow much sooner than expected.

  • Cypress, TX · Member since 2018 · 15 posts · 2 votes
    8y

    Way to go!! The podcast is definitely a constant motivator.  The first flake in the snowball.   

  • David BarnettPro Member
    Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
    8y

    @Account Closed Congratulations on getting the first deal under your belt.

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    Thank you @David Barnett!

  • Sioux Falls, SD · Member since 2018 · 7 posts · 2 votes
    8y

    @Account Closed - just joined the BP forums and am from the MSP - Richfield area. Very interested in getting started with my first property as well. Would love to chat! Good work on this! 

  • Rental Property Investor · Minneapolis, MN · Member since 2018 · 8 posts · 1 vote
    8y
    @Nathan Anderson @Brenton Braddock Congrats Brenton! Huge move! I’m from MSP too and am just finding my way in this world! I’m so excited and trying to soak in as much information as possible with my friend. I’m working on my team right now, too! What area did you choose for your condo? And did the numbers lead you to a condo vs SFH? I’m looking at condos now as some of the SFH homes are in less than desirable areas for me. I’m trying to use the 70 percent rule as a guide but feel there will be some good markets for condo renting! Have you got it rented out yet? Congrats again! Still learning over here and reading 😬
  • Flipper/Rehabber · Roseville, MN · Member since 2018 · 73 posts · 38 votes
    8y
    @Brenton Braddock awesome!!! Congrats on the first deal! I love that you chose to give a shout on BP about this. Also glad you jumped in! The best way forward is one foot in front of the other, right!? Congrats again!
  • Manchester, TN · Member since 2016 · 67 posts · 9 votes
    8y
    @Brenton Braddock congratulations on your first deal
  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    Thank you @Tanya Rooney!  I figured I needed to get better about posting on here and meeting people and this was something that I was excited to talk about! Couldn't agree with you more! On to the next one now!

    @David Schwan

    @David Schwan thank you!

  • Bridgewater, NJ · Member since 2015 · 100 posts · 31 votes
    8y
    Congrats man!
  • Cortland, NY · Member since 2018 · 19 posts · 3 votes
    8y

    Congrats on your first deal. Hoping to find my first deal before the end of the year.

  • Rental Property Investor · Turlock, CA · Member since 2018 · 226 posts · 147 votes
    8y

    @Account Closed, Congrats on closing on your first deal! My wife and i are still working on finding our first one. I may have  a little analysis paralysis but I built a spreadsheet to help me out. CA market is hot and I am trying to get cash flow so when analyzing properties a lot of time it is negative. So although I am itching to buy our first, its better to wait than buy a bad deal. 

    Numbers have to work!!  Hope you pick up a few more by years end!

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y
  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    Thanks @Kevin Moules!  I think you are being smart about it and waiting for the right first property.  No point in buying the first place only to be forking over $200 a month to go towards the mortgage.  I spent the first 4 months of this year living in San Francisco and could not believe the price of housing out there! 

    Are you primarily pulling places off the MLS or are you looking at off market deals?

  • Rental Property Investor · Turlock, CA · Member since 2018 · 226 posts · 147 votes
    8y

    @Account Closed, totally agree with you. I want it to feed me, not the other way around. I am currently set up with 2 MLS lists from different areas of the state. I am looking to get set up with another MLS list from another city I am interested in as well. I have thought about off market deals and have sent 3 handwritten letters out to houses I drove by in town.

    I have not truly pursued this avenue because even If I could get a home with an off market deal, I do not think it would sell low enough to cash flow as a rental. Right now my market is getting close to 300k on 3-2 homes that have not been renovated. Even If I could buy one for 200K i would be looking at about 1500 in rent per month which would not cover PITI and other expenses. Right now my market is great for flips but have not wanted to pursue that ave on my own at the moment since I work full time and run an handyman business on the side. This eats up time after work and Saturdays. To flip a house is a job. It's not completely out of the question but just not enough hours in the day to do it all alone.

    I did have someone reach out from BP who wanted to sell me a list of prospects for mailers. I have not followed up and pursued it. I probably should, just to see what kind of responses I would get. At the end of the day I could just find and off market, fix it up, and flip it and make the time, or if its a good deal I could always wholesale it. Granted buy and hold is my ticket to long term goals in life. 

    Were your places off market or MLS?

    I see your from the twin cities. I spent some time out in West St. Paul doing missionary work for a organization called NET Ministries. I truly enjoyed the area and hope to return and visit someday when RE has given me more freedom!

  • Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
    8y

    There are deals, you just have to be diligent and move quickly. Just closed on a SFH in South Minneapolis in the Kingfield neighborhood that is 3 bed/2 baths. l bought it for $165,000 putting in a $35,000 renovation (new roof, new kitchen, refinish flooring, paint, several new doors, upgrade heating system) so I'll be all in at $200,000. It's already rented for $1800/month starting Sept 1st so I'll cash flow while waiting to sell after a year and a day to get long term capital gain status. ARV is $260-$275,000.

  • Real Estate Agent · Saint Paul, MN · Member since 2018 · 18 posts · 10 votes
    8y
    @Brenton Braddock Congrats on your first deal and way to take action!
  • Real Estate Agent · Reisterstown, MD · Member since 2017 · 13 posts · 3 votes
    8y

    congrads!!! awesome job

  • Member since 2018 · 44 posts · 15 votes
    8y

    That's great and congrats!

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    @Kevin Moules I don't know much about the market in California (other than that it sounds expensive) but I think you should explore the off-market route.  What's the worst that could happen?  Spend $100 or $200 bucks on lists or mailers or set aside a weekend and go knock on a few doors.  It's all about putting in the time.

    We actually found our place on the MLS but we have a spread sheet of close to 100 properties we ran the numbers on first before pulling the trigger on the one we just closed on.

    My mentality is someone, some way is making a deal happen every day in every market.  You just need to put in the work to be that person getting that deal done.

    Glad to hear you enjoyed your time here!  You must not have been visiting in January haha.  Honestly though it's truly a great place to live and it's hard for me to imagine living anywhere else.

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y

    @Bruce Runn congrats on your most recent deal!  Smart thinking to hold off a year to lower your tax rate on the deal.  The South Minneapolis market is really becoming popular and I don't see that slowing down anytime soon.  All my friends (in their mid-twenties) are looking to buy places there.  You should not have any problem getting top dollar for that place in a year.

    I am assuming you found this deal off market, correct?

  • Rental Property Investor · Minneapolis, MN · Member since 2016 · 37 posts · 35 votes
    8y
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