Snapshot of my first 19 months- 5 units later

[Andrew Wright]

 In 2014 my fiance and I bought our personal residence in Connecticut. Less than a mile from the beach, it was supposed to be the house we raised kids in. Fast forward to the summer of 2016, my wife gets accepted to medical school in Antigua, and I find myself in a 1600 sq. Feet, 3 bedroom, 1.5 bath home alone. We decided that in order to help with the expenses, I'd rent a bedroom in the house for $650. I posted an ad on craigslist, and in 2 weeks I had my first tenant, a divorcee looking to be closer to his kids, no background check but everything worked out great. 

After attending a rich dad poor dad seminar in March 2017, I decided real estate investing was going to be my vehicle to financial security. After educating myself ( read all of Brandon Turner's books) over the next six months, I closed on our first investment property in November. A single-family property that needed minimal work. Here are the simplified numbers.

Purchase Price:$138500

15% down :$20775

Rehab: 3k

The seller gave 2k towards closing costs

 All-in cost: 28k. 

The house rented for $1600 per month which has been raised to $1630. After debt service, I net $604 per month. 

In January 2018, my dad and I  purchased another single-family home, which nets $520 per month.

At this point, I was still living at my personal residence but I knew I wanted to acquire a multifamily unit. Funds were a bit tight as I had used a good portion of my capital to obtain the previous properties. I rented my personal home and moved in with my parents in order to qualify for FHA financing. When my wife came home on break, we stayed at an Airbnb.

 In September 2018 we closed on a duplex with a finished 3rd level. I rehabbed the first floor with all new appliances, cabinets, vinyl plank flooring, and fresh paint.  A wall was closed to create a 2nd bedroom. The Heating was changed from oil to gas, so a new furnace was put in for the 2nd unit along with a new water heater. I also added a small bathroom and kitchenette to the other group.

 This property came with a few unforeseen headaches, the electrical wiring was a mess which had to be corrected. Also, there was a crack in the  stack resulting in a leak which was missed on inspection. This proved to be costly as the entire stack had to be replaced, however, this was a blessing in disguise as the stack was almost blocked which would have backed up. The home also needed a new roof.

These are the numbers for this property

Purchase price: 225k

 Cash to close with 3.5 % down ( $500 seller credit and $1346 lender credit):$13166

Rehab:$40k

All-in cost -$53166

Rents- $2400

After debt service, the net is $ 740, now $840 after streamline refi.

I have no regret at this point, I have made some mistakes thus far, but I'm happy with my progress. If I didn't take action I'd still be working two jobs and be even more worried about my family's financial future.

I've been earnestly seeking private lenders and educating myself on partnerships, raising private capital and syndications. In the next year, I plan to sell my first home and use that windfall to acquire more multifamily units either by joint venturing or syndications. 

Being a real estate investor has been great; it has become a passion. Nothing gives me more joy than to transform a home while providing a safe and comfortable environment for tenants.