Just Closed My First Deal!
BP family! I'm very excited! I just closed my first deal as an investor a week ago. After scouting the MLS for months I finally pulled the trigger on a duplex (1 bedroom over 1 bedroom) in West Philadelphia. It's not the deal of the century, but here are the numbers:
List Price: $69,900
Purchase Price: $60,000 + $500 seller concession (net purchase price: $59,500)
Appraised Value: $67,000
Downpayment: $15,000
Projected Gross Rent: $1,250/mo
As mentioned before I didn't hit a homerun but the numbers work. I managed to have the seller make a good number of repairs and turn over the units (since both were vacant). The property already had a new roof, updated electric and plumbing installed throughout so all that's really needed now are cosmetic updates. Here are some pictures:
I'm in the process of getting the floors in the second unit refinished and heeded the advice extended in many of the posts that predate this one "get multiple contractor bids!" I was surprised at how wide the spread in the bids would be.
What Will I Do Different Next Time:
My goal is to acquire 100 units over the next 10 years. I've come to the conclusion that in order to do so I can't go about purchasing property as a retail buyer, tying up all of this cash. With this property I was just so eager to actually do something, rather than sit on the sidelines and analyzie deals for God knows how long. I've told myself that my next purchase will be a value add project where I can get my capital back after a cash-out refinance and use the money towards the next acquisition (good 'ol BRRR strategy).