Closed on my 1st Investment!

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Closed on my 1st Investment!

Dominique B.
Rental Property Investor · Washington, DC (Metro) · Member since 2020 · 39 posts · 136 votes

Investment Info

PP- 53k

Closing – 3k

Repairs/Rent-Ready updates: 5k

Additional Holding Cost (Rental and lead inspection, home inspection, etc.) – 1k

All in Costs – 62k Cash

What made you interested in investing in this type of deal?

My goal was to purchase a buy and hold for passive income. After running the numbers and approving of the block, the deal made sense.

How did you find the deal and negotiate?

This was an off-market deal that was sent out via a mass email blast. I opened the email at 2am, scheduled to see it at 4pm and made the offer at 4:15pm.

How did you add value?

The property was nearly turnkey. I made minor repairs based on feedback received from the home inspection and cosmetics updates (repair roof over porch, replace carpet, new paint, new blinds, and update appliances)

What was the outcome?

I have hired a management company to handle placing a tenant and the day-to-day operations. Rental comps in the area will garner $1300 – $1500. I will be putting a HELOC on the property and pulling out 75% of my funds to use as another cash buy for my second property in March.

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Most Popular Reply

Leo Watts
Real Estate Agent · Washington, DC · Member since 2017 · 109 posts · 93 votes
5y

@Dominique B.

Looks great! What zip code? Any HOA?

4Reply
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  • Colton Hamilton
    Rental Property Investor · Member since 2021 · 16 posts · 4 votes
    5y

    @Dominique B.

    So you do you own the property free and clear with no loan attached except in the future when you put the HELOC on it? I'm interested because my first rental property I bought I only owe 72k on it but with a reappraisal it's be worth 150-160k and I want to put a HELOC on it but it's hard finding a lending institution that will do that without it being my primary residence. Any insight is definitely appreciated!

    Btw, nice job on the deal!

    0Reply
  • Thomas Greer
    Real Estate Consultant · Member since 2020 · 80 posts · 102 votes
    5y

    Congrats!

    0Reply
  • Lamar Washington
    Investor · Palm Beach County, FL · Member since 2019 · 38 posts · 27 votes
    5y

    @Dominique B.

    Congratulations! Great way to start the new year.

    0Reply
  • Michael DiNuzzoPro Member
    New to Real Estate · Long Island, NY · Member since 2020 · 14 posts · 5 votes
    5y

    @Dominique B.

    Congratulations! I am chasing my first now!

    Trying to pick a market that I see potential in. What made you choose yours?

    All the best!

    MD

    0Reply
  • Dominique B.
    OP
    Rental Property Investor · Washington, DC (Metro) · Member since 2020 · 39 posts · 136 votes
    5y
    Originally posted by @Colton Hamilton:

    @Dominique B.

    So you do you own the property free and clear with no loan attached except in the future when you put the HELOC on it? I'm interested because my first rental property I bought I only owe 72k on it but with a reappraisal it's be worth 150-160k and I want to put a HELOC on it but it's hard finding a lending institution that will do that without it being my primary residence. Any insight is definitely appreciated!

    Btw, nice job on the deal!

    Thank you! Yes, I own it free and clear and it will only be leveraged when I find another similar deal and pull the HELOC to use as another all cash buy. I ran into a lot of no's for the same reason as you, that HELOCs on investments, especially ones held in an LLC, are not common (from what I can tell). I was able to find a couple banks that offered HELOCs on investement properties but not on ones held in an LLC. I was very,very close to just switching the property out of my LLC to my name when I made a final call to a small local bank and recieved a yes. Look into your local small banks and credit unions.

    1Reply
  • Tracy Fascia
    Rental Property Investor · Belmar, NJ · Member since 2020 · 18 posts · 5 votes
    5y

    @Dominique B. Congratulations on your first deal!! Would you mind explaining in just a little more beak down details for me? Did you put down cash saved to purchase? How does the HELOC work on your next purchase? Thank you

    0Reply
  • Timothy Lewis
    Investor · Miami, FL · Member since 2013 · 377 posts · 258 votes
    5y

    @Dominique B.

    Huge Congrats!

    1Reply
  • Dominique B.
    OP
    Rental Property Investor · Washington, DC (Metro) · Member since 2020 · 39 posts · 136 votes
    5y
    Originally posted by @Tracy Fascia:

    @Dominique B. Congratulations on your first deal!! Would you mind explaining in just a little more beak down details for me? Did you put down cash saved to purchase? How does the HELOC work on your next purchase? Thank you

    Sure, hope this helps:

    1. Personal capital for this deal was acquired from my W2 savings over a 10 month period.  

    2. All in cash purchase for this was 62k. 

    3. Home is owned free and clear.

    4. Local bank will be extending a HELOC at 75% of appraisal of property.

    5. For example purposes, lets say the home appraises for 68k. I now have a LOC for $51k that I can use similar to a credit card and I am now positioned as a cash buyer to sellers.

    6. I find another deal that meets my criteria. I pull the LOC plus using personal capital to cover the difference and purchase H2.

    7. H1 is now leveraged. H2 is now owned free and clear. 

    8. CF from H1 and H2 plus personal surplus income is fired at the paying off 51k aggressively and quickly. 

    9. Once 51k is paid off, H1 is now back to free and clear and 51k is there to be pulled out again for purchase of H3.

    10. Pull 51k, H1 is now leveraged, H2 and H3 are now owned free and clear. 

    11. Repeat steps 8-10 over and over to scale.

    4Reply
  • George Allen
    Rental Property Investor · Kihei, Maui · Member since 2019 · 12 posts · 5 votes
    5y

    @Dominique B. Aloha and well done!

    0Reply
  • Larell Kelley
    New to Real Estate · Cincinnati, OH · Member since 2020 · 3 posts · 1 vote
    5y

    @Dominique B.

    Wow very nice Congrats!

    0Reply
  • Demetrius Gatling
    Investor · Stockbridge, GA · Member since 2015 · 60 posts · 16 votes
    5y

    @Dominique B. Great job using your resources keep up the good work.

    0Reply
  • Colton Hamilton
    Rental Property Investor · Member since 2021 · 16 posts · 4 votes
    5y

    @Dominique B.

    Awesome! I’ll definitely look into that for sure!

    Thanks!

    0Reply
  • Terrin Mariner
    Member since 2020 · 1 post · 0 votes
    5y

    @Dominique B.

    Congratulations!

    0Reply
  • Bernadette Williams
    Torrance, CA · Member since 2020 · 1 post · 1 vote
    5y

    Congrats, Dominique! Thanks for sharing this milestone and for responding to everyone's questions with such detail. This is really informative and inspiring!

    1Reply
  • Maurice Bishop
    Real Estate Agent · Los Angeles, CA · Member since 2020 · 12 posts · 6 votes
    5y

    congrats! best of luck

    0Reply
  • Michael Penn
    Member since 2020 · 9 posts · 0 votes
    5y

    @Dominique B. Congratulations!

    0Reply
  • Patricia Gonzalez
    Jurupa Valley, CA · Member since 2020 · 1 post · 0 votes
    5y

    @Dominique B. Congratulations!

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y
    Originally posted by @Jonathan Crawford:

    @Ola Dantis

    I was thinking the same. In my local market you would be lucky to find a property with gross rents > 10% PP, 25% is insane! Nice find OP!

    When I hear of these I wonder why anyone in their right mind would rent when they could own it in 4-5 years.

     Jonathan, one of the things I am learning in this life is that you just don't know what you don't know!

    1Reply
  • Ernest Partin
    Rental Property Investor · Boston, MA · Member since 2018 · 99 posts · 33 votes
    5y

    Great Job Queen Dom, 

    Wishing you many more to come!!

    1Reply
  • Alexander Lang
    Rental Property Investor · Savage, MN · Member since 2016 · 202 posts · 61 votes
    5y

    Congratulations on the first property! looks great! Best of luck on your future endeavors! 

    0Reply
  • Alexcia White
    Rosedale, NY · Member since 2016 · 120 posts · 24 votes
    5y

    @Dominique B. Great job!! Especially coming from a woman.. did you fund the deal yourself?

    Does the bank allow you to do a HELOC in such short time, what's their time period? Getting ready to jump in myself... Thanks

    0Reply
  • Nishi Lagoo
    Vancouver, BC · Member since 2017 · 24 posts · 12 votes
    5y

    @Dominique B. Great job. Looks like a great deal.

    0Reply
  • Dominique B.
    OP
    Rental Property Investor · Washington, DC (Metro) · Member since 2020 · 39 posts · 136 votes
    5y

    @Alexcia White thank you. Yes, fully funded by me. No partner. I found a small local bank that offers their product with no seasoning or time restrictions. The process takes about a month. I’m 2 weeks in already.

    1Reply
  • Noah Wasserman
    Flipper/Rehabber · Boca Raton, FL · Member since 2020 · 12 posts · 10 votes
    5y

    @Dominique B. Thank you so much for sharing your first deal! I have been getting a bit frustrated trying to figure out how to put the pieces together for my own first deal. I just opened up BiggerPockets to start reading and thank G-d I stumbled to hear someone is accomplishing the same thing that I want to do. Seeing this I know its possible. Now I have some more courage to keep on trying, calling, and making offers.

    Can’t wait to share you my first deal!

    1Reply
  • Alex Get
    Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    5y
    Originally posted by @Dominique B.:

    @Chris Ramos with the bank I'm going with there is no seasoning period required. The HELOC will be based on the appraisal (taking place next week). I've had my realtor resource run comps and it should fall into the 65-73 range.

     Congratulation!

    I am also running RE business in Balto, I have  several properties with over 100k equities on most of them but to cash out from them  finding bank like yours is not easy task so do you mind to PM me the name of the bank that you are going to work with?

    thank you

    0Reply
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