My First Real Estate Deal

39 Replies

So after much reading, I finally decided to take a shot at my first real estate investment; thanks in no small measure to all the wonderful information here at BiggerPockets. So here are the details:

Closed 5/11/17 

Finished Rehab Mid July

Placed a tenant Mid August

1,100 square foot  3 bed, 1.5 bath house, built in 1970, on a corner lot 1 block from a major university and health complex in Oklahoma City. 

Before Pics:

After Pics:

Here are the numbers:

Purchase price: $55,000

Down Payment: $15,000

Monthly Mortgage (with taxes and insurance): $308

Closing costs/transactional fees: $3,600

Rehab costs (including appliances): $13,000

Monthly Rent: $975

So, I'm really happy with how it turned out, and I think I will be able to increase the rent next year too. Now it's time to start thinking about deal #2! Much thanks to everyone who helped me make this a reality, especially @RhettTullis and @ChrisLauhon and everyone at Integrity Oklahoma for helping guide me through the process. 

Updated 10 months ago

I forgot to include exterior pics, so I have now added those to the album.

I was just thinking about this deal yesterday and was curious how it turned out for you. Congrats man! Sounds like it went well. Curious though, did you go for short term tenants like travel nurses and med residents?

@Rocky Griffin , actually I got a pharmacy student in there who has 2 years of school left, so I imagine she will likely bet there for the full 2 years. 

wooden floors was a nice touch. so was the color chosen for the walls. good job

Fantastic deal, doesn't get any better than that. Well done!

Not only does the property look fantastic (I'm sure your tenants will love living there) but it will stand the test of time over the years. This a great investment. Low risk, big returns.

@Chris Sullens Great Job! Keep up the good work!

How did you go about with financing the project?...Hard Money? Cash? Line of Credit?

@Mason English . I was going to try and use a HELOC, but when I learned that I could take a loan against my truck for 4% and with just a $100 fee, and get it the same day, I just did that. So 15k from car loan. 5k Credit card. And the rest just cash from savings. I plan to payoff the loans pretty quickly.

Originally posted by @Chris Sullens :

@Mason English . I was going to try and use a HELOC, but when I learned that I could take a loan against my truck for 4% and with just a $100 fee, and get it the same day, I just did that. So 15k from car loan. 5k Credit card. And the rest just cash from savings. I plan to payoff the loans pretty quickly.

Applying for the HELOC first and getting approved for that and then having it available (but dont take out money yet), and THEN getting that truck loan wouldve been a better choice. It may now be hard to get that HELOC approved for as much as you could have beforehand (did you get it first already)?

Someone tell me I'm wrong if I'm wrong. I believe that there is a certain way you gotta play the credit game.

@Jason Chen , yeah. The truth is that I stumbled across this deal before I was really prepared to act on it financially. So I had to scramble and hustle to make it happen. The weeks for the HELOC to go through would have killed the deal. Of course, if I had been planning further ahead, that might have been a better option.

Congrats on jumping in! Those numbers look pretty amazing.

The rehab looks really good. Congrats.

Looks great! Did you do the work yourself?

Love the flooring! Do you have a breakdown of your repairs cost? It looks like you finished everything very affordably.

Congrats on your 1st deal! 

Wow, great job dude! Thanks for sharing!

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@Austin Peck , I don't really have the breakdown, but I worked every angle I could think of. For one thing, I got in contact with a property manager in town and used referrals from him to find contractors. He has spent a lot of time finding people who can do good enough work at a low enough price. The floors, for example, I got done for right at $2000. That includes materials and labor, as well as tear out of the old floor. I learned that you can get paint from Sherwin Williams for about $20/can if you know to ask for ProMar-200 (which isn't on the shelf anywhere). I went appliance shopping on craigslist the day after a big memorial day sale at HomeDepot when people were unloading their "used" appliances. So I got that fridge, range, vent hood, dishwasher, microwave, washer, and gas drier for $800 all together. I bought most of the regular supplies at Home Depot and looked for anyway I could save. For as much as we did to the place, I'm pretty happy with the cost. 

What rental contract did you use? Thinking about turning over my first rental from a flip I'm in the middle of.

The $13,000 includes:

Replacing one entire gable, repairing another gable, tearing out all bathroom tile and old vanities, new flooring (vinyl plank), 4 new ceiling fans, 2 new toilets, 2 new bathroom vanities with new countertops, sinks and faucets, new kitchen counter with new kitchen sink and faucet, paint on all surfaces inside and out (except brick), new doors, new hinges, new cabinet hardware, new bathtub surround, minor carpentry repairs, all new light fixtures, all new switches and outlets throughout, some minor electrician work, minor plumbing work, various minor drywall repairs, gutter repairs, painted concrete porch, new pillar for front porch, doorway thresholds, all new blinds, replacement of a broken window pane, all the appliances, and all the labor. I'm sure I'm forgetting something but that's about it. 

@Chris Sullens you have a great property there. dale did a great job finishing it out for you.  the interesting thing on this property is that due to the area you will see some awesome appreciation in the years to come.  great job finding an awesome rental.

@Rhett Tullis , thanks! I appreciate all the help from you and your team. I really hope you are right, and I feel the same way. 

@Matthew Cretzman , I am using property management. So they just used their standard lease and I didn't involve myself much in the details there. 

Very impressive @Chris Sullens .

I like your hustle! Where did you find the property, MLS? And did you do much negotiating?

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