My first rental closes tomorrow

17 Replies

Howdy all,

I am finally closing on my first investment property tomorrow. This post might be a bit premature for a "success" story, but I'm very confident that this is a good deal. It's a 4 bed/2 bath built in 2006. Inspection shows it needs very minor repairs. There is currently a long term (>3 yr) tenant who is on section 8. She is a single mom with 6 kids. Considering this, she keeps up the place very well. The Durham Housing Authority pays the entire rent amount of $1050. Purchase price is $94,500, PITI is $530. The house is located in South Durham which is seeing a lot of growth recently, and is only about 1 mile from my house. I want to thank the BP community for the incredible amount of help/knowledge you have supplied me. Hoping to purchase my second property within a few months.

@Ross Bernard:

 Sounds like a good investment! Was this property on the market or off-market?

Adrian Chu

    The house was listed on the MLS but not on Zillow. The seller is moving to Florida and first attempted to sell his 9 Durham rentals as a portfolio, which didn't work out, so he began selling them individually.

    Congratulations. I think it is a good deal as I lived in that area for many years.

    How old is the house? Did you directly have access to MLS or hired an agent?

    Great Job and Congratulations. Great purchase price. 

    Henri Meli

      Congrats on your first property. I just read another post about how the landlord lost 3 years of cash flow due to A/C and Maintenance issues. So, make certain that you set aside money each month for CAP EX and maintenance. Six children may put lots of wear and tear so make sure you set money aside for it. Sounds like easy income from Housing Authority each month. Nice success story.

      Originally posted by @Alpesh Pandya :

      Congratulations. I think it is a good deal as I lived in that area for many years.

      How old is the house? Did you directly have access to MLS or hired an agent?

       The house was built in 2006. The realtor I am using has her MBA, is a general contractor, and owns rental properties. She was as good a find as this house.

      Everything sounds really good about this house.  The price is right.  The age is right.  The secItion 8 lady sounds fine and the income is excellent.  You've got the 2% rule!!!  lucky you

      Congrats @Ross Bernard it sounds like a good deal!

      If that investor you got this one from still has some more of his portfolio he's looking to dump I'd be interested! 

      Hey @Ross Bernard , congratulations on your first rental!  To @Rhondalette W. 's point, definitely set aside that money each month for capital expenditures, you'll use it!

      Hey @Barbara G. , I don't think he's quite hitting the 2% rule.

      http://www.biggerpockets.com/renewsblog/2014/08/10...

      The monthly rents would have to be around $1900 a month to be 2% of the purchase price.

      BUT, he is over 1% so he has a good chance of cash flowing according to the 50% rule.  (50% of gross rents will go towards expenses not including debt service: taxes, insurance, management and capex)

      Well done Ross, I would say this is a definitely success story because you're taking action, most never do.  Keep us updated on your progress.

      I wish you all the best!

      Originally posted by @Ross Bernard :

      Howdy all,

      I am finally closing on my first investment property tomorrow. This post might be a bit premature for a "success" story, but I'm very confident that this is a good deal. It's a 4 bed/2 bath built in 2006. Inspection shows it needs very minor repairs. There is currently a long term (>3 yr) tenant who is on section 8. She is a single mom with 6 kids. Considering this, she keeps up the place very well. The Durham Housing Authority pays the entire rent amount of $1050. Purchase price is $94,500, PITI is $530. The house is located in South Durham which is seeing a lot of growth recently, and is only about 1 mile from my house. I want to thank the BP community for the incredible amount of help/knowledge you have supplied me. Hoping to purchase my second property within a few months.

       Nice!  Look at you go!  It's always scary when you do your first place.  I know I had triple checked my numbers, asked myself a ton of questions, and had a lot of self doubts.  But once I got in the swing of things, it was all gravy.  Congratulations!

      Originally posted by @Barbara G. :

      Everything sounds really good about this house.  The price is right.  The age is right.  The secItion 8 lady sounds fine and the income is excellent.  You've got the 2% rule!!!  lucky you

      The numbers I am seeing must be different than yours?

      Comes in a 1.1%

      7 People, hopefully they pay water

      Sorry when I said he made the 2% rule I thought he was buyng a duplex and not a SFH.  I guess since we've only been buying duplexes, I made that error BUT it's still good.

      Way to go on your first rental that's just motivation for the rest of us. Congrats

      Congratulations! Sounds like a great deal!!

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