Success story - still in the making...
Originally - I planned not to post anything until I have a full story to tell. However I figured I'd go ahead and post an update on what seems to be turning into a great first REI success story for me. I started the journey of purchasing my first home in summer of 2015. I began by looking at a few properties, talking with my agent (a close friend), and learning about the process. At that point, I didn't know the first thing about buying a home. I had no knowledge on what to look for, what's a good deal, why I should buy, what to look for in a house, how lending worked...etc. I only knew that I wanted to stop paying rent and purchase a property that was a good investment. A buddy of mine had purchased a home in May of 2015 with a normal mortgage - the home needed some work but not enough to fail the bank's inspection. He bought it with a small escrow account for the repairs, did the work...and those improvements along with the market growing rapidly the following year he gained some solid equity. He also rents a room out to a roommate. His well planned purchase and plan to rent out a room instantly put him in a much better financial situation than he was before.
Anyways, early Fall 2015 I decided I wasn't ready yet to purchase. It wasn't until the end of Q1 2016 that I began the process again. My intention was to follow the suit of my friend - however after looking at several properties I soon realized that I was buying in a much different market than he did. Anything that could pass inspection in my area was selling high and quick. There seemed to be no deal to be had......except for the few really run down properties I looked at...and even those were going quick, often for cash. Whenever we looked at one - once we realized the state of the property was too poor for a normal mortgage, my agent would say "this is a rehab loan!" and that would be the sign to move on to the next one. During that time is when I found BiggerPockets. I loved the idea of the website, was inspired by others' success stories which helped me realize I could do this, and also learned a TON from the podcasts. Eventually, I wondered why we were just writing these rehab properties off and realized that rehab loans were maybe something I should look into. Long story short - I looked up someone in the Richmond, VA area who did rehab loans (my lender at that point did not), went and met with him and then began my search for a rehab property. I ended up making an offer on this rundown foreclosure and about a month later the property fell down to me. (apparently I was the fourth highest bidder but ended up with the property). Closed in June - Contractors just are finishing up their work and I am still working on the stuff I left for me (and will be for a while). And I also have a roommate lined up.
Front of house:
View of living room / kitchen before purchase:
View of Kitchen before purchase:
View of downstairs bathroom before purchase:
One of the bedrooms:
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Here are some pics of the current state:
The plan is to live in / work on for 2 years. During that time I will also be renting out a room. At the end of 2 years I will sell and purchase (hopefully) 2 more properties. This property was purchased at $74k - at the end of it all I will likely have put in around $35k (mostly through the loan). Sale is expected to bring in $150-160k.
I will post a complete story with better/more pics once it's fully complete. Thanks!