After 3 months of pure stress & anxiety...I got my 1st property!!

23 Replies

Hey guys!

So I had a goal to buy my first home by the end of this year. I spent early morning and late nights stalking Zillow, and, in early October, my diligence paid off and I found what would be my first property!

- 3-story, 3100 sq ft with unfinished basement and 1 car driveway (and a small backyard)

- 3bd, 1 and 1/2 bath unit (gonna rent for $1450)

- 4bd, 1 and 1/2 bath (gonna rent for $1700)

- 2bd, 1 bath (gonna occupy this one, then rent for $1250)

I did the walkthrough with my realtor and everything was pretty much decent. The seller flipped homes, so the units were in great condition. There was a broken window and the stairs down to the basement caved in (during my inspection), but the seller took care of those issues so I was ok. It's a 3 family, and though 2 units were vacant, 1 was occupied by a tenant with 15 DOGS. No, I'm not exaggerating. It's a month-to-month tenant , so he's been served a 60-day NTQ, but that was a headache in and of itself.

I was an FHA applicant, so you're probably thinking the 3-month timeline was due to the FHA process. Haha no. Surprisingly, the FHA process was very streamlined. My loan officer was amazing, plus I keep all of my tax documents in one place, so getting the documents over to the underwriter was the least of my issues. The problem was what is known in NJ as "attorney review". I was told that this was a mandatory process in NJ that typically takes 3 days at the most.

We were in attorney review for 5 WEEKS. 

Why did it take so long?! Well it was a mixture of things really. Between the seller's attorney being based in NYC but practicing law in NJ (she wasn't good at it), my attorney being selectively responsive and apparently missing important emails, the seller's attorney observing a million religious holidays and being mostly unavailable, the fact that BOTH attorneys were so busy with court cases that my poor AR was of little priority, AND that ALL of this was going on around the holidays (Nov/Dec)??? It was just a complete disaster. These attorneys had some sort of personal vendetta against each other that no one else knew about, which was cause for many heated emails (and conference calls) and drew out the process THAT much more. And the sweet cherry on top was the fact that my landlord was letting me break my lease under the condition that I move out by Dec 23rd. 

We ending up closing on Dec 22nd.

We were initially supposed to close by Nov 30th, but the AR dragged on unnecessarily for SO LONG...for my first property, there were SO many times I just wanted to cancel the deal and give up. It was indeed a rollercoaster and I was deathly afraid of being homeless. The seller did offer to let me live in one of the vacant units until we closed, so then I was deathly afraid of having to pay her rent (I'm cheap "frugal".) I did make some silly mistakes too. When it came time to send out the check for the deposit, I sent it overnight to the seller and she cashed it but the money would not leave my account damn it! For 2 weeks I stressed and stressed, went back and forth with my bank, with the seller's attorney...only to find out I never signed the check. Oops. (I'm a millennial, please don't judge me haha.)

Nine times outta ten I was venting all of my worries and frustrations out to my realtor, who I'm sure caught instant headaches whenever I called him. But he was very resourceful and gave an arm and a leg and then some to get this deal closed. The last week before we closed, the attorneys were still scrambling to get important documents to each other and file certain provisions with the State and City...my anxiety was through the roof all the way up until closing, when the seller's attorney had to hand deliver the original documents to closing (she ended up sending the documents in an Uber because it was late Friday night and the holiday traffic meant that she might not make it back home before Saturday to observe the Sabbath.)

All in all, this was a VERY eventful process. I wish I could tell you the full story in all of it's detailed hilarity, but I'm sure that I'd pass the BP character limit 3 times over. But...I didn't give up! I got the house and I'm sitting down typing this post from inside of it now! Can you believe it? Can you believe I made it?  I still don't. 

Merry Christmas to me, huh?

Well @Gina Clarke congratulations for this achievement. Yes, you really made it. YOU DID IT.

Closing doesn't need to take this long. But you persevered and pulled it off. You never gave up. 

Always remember, this is a learning process. Relax. Grab a piece of paper (or open notepad document on your computer) and write down the things that went right and the things that can be improved on. Next year when you perform your next closing, things will be smoother. 

Wishing you many many more closings. 

Happy holidays. 

Congrats on purchase. This is a big success buying a multi unit as your first. Any photos to share? As you get more comfortable you fill find attorneys can be done without. Build a relationship with your agent if you want to work together again, they can even give you some rebates for partnering together. I be curious to know the cash flow and cap rate, I didn't see much on the financials.

hilarious yet very inspirational.
Congrats!!!!!

@Henri, Thanks! I have DEFINITELY learned a lot this time around and will make sure I don't make the same mistakes. Happy Holidays to you and yours as well!

@Irum haha thanks! Happy Holidays!

@Paul, I'm still new to this, but the purchase price was $215k. I did a seller's concession of $5k, plus I got $4k credit from my lender towards closing. That took my interest rate from 3.75% to 4.25%. 

The mortgage will be about $1850. Cost of utilities I'm still not sure of since it hasn't been a month yet, but I'm projecting to be around $200 for electric for the common areas and for the water bill and garbage pickup. So with me bringing in the $3150 from the rent, my NOI will be around $1100 per month. And that's with me living in the 3rd unit. Once I move out of the third unit I'll be renting it for about $1200-$1300, bringing my monthly NOI to about $2300 - $2400.

I'm considering overpaying the mortgage a bit so I can knock down the principal amount quicker, but I'm still unsure about that.

I can post the pics from my inspection maybe sometime today or Tuesday.

Thanks for the kind words, and Happy Holidays!

Congrats!! Awesome story as well I’m glad worked out and Happy holidays!

Conratulations!  It sounds like the whole experience let you learn a lot in the process so going forward you'll be that much more prepared to deal with issues as they pop up!

@Gina Clarke

Congrats on your first investment! Don't forget to include CAPEX and a Repair budget in that operating expense. Also, would definitely include 10% for property management fee to pay yourself or pay a professional in the future if you decide to go that route.

3150 gross rent

200 utilities

XX property tax

XX landlord insurance

157.5 or 5% CAPEX

157.5 or 5% Maintenance and minor repairs budget

315 or 10% PM fee

- 1850 mortgage payment

= 470 per month before the property tax and landlord insurance

You'll pocket the 315 for PM fee, so that's 785 before property tax and landlord insurance

Just want to protect yourself with real numbers, and conservative ones...  I typically use 10% for maintenance and minor repairs for 4-plex+ because one simply maintenance call can be over $100+.

Congratulations and hilarious now that it's finally over! 

Originally posted by @Henry Chi:

@Gina Clarke

Congrats on your first investment! Don't forget to include CAPEX and a Repair budget in that operating expense. Also, would definitely include 10% for property management fee to pay yourself or pay a professional in the future if you decide to go that route.

3150 gross rent

200 utilities

XX property tax

XX landlord insurance

157.5 or 5% CAPEX

157.5 or 5% Maintenance and minor repairs budget

315 or 10% PM fee

- 1850 mortgage payment

= 470 per month before the property tax and landlord insurance

You'll pocket the 315 for PM fee, so that's 785 before property tax and landlord insurance

Just want to protect yourself with real numbers, and conservative ones...  I typically use 10% for maintenance and minor repairs for 4-plex+ because one simply maintenance call can be over $100+.

Hi Henry,

Thanks for the info. The Capex and maintenance savings were actually included in my initial calculations, but i didn't put it here on BP. Being a renter previously, I'm saving an additional $1250 every month by not having to pay rent/mortgage, so I was actually subtracting the money for repairs from there.

Originally posted by @Gerald Barron :

Congrats!! Awesome story as well I’m glad worked out and Happy holidays!

 Haha thanks Gerald, and same to you!

Originally posted by @Adam Johnson :

Conratulations!  It sounds like the whole experience let you learn a lot in the process so going forward you'll be that much more prepared to deal with issues as they pop up!

Yeah that’s how I was looking at it. It’s like almost everything that could’ve gone wrong in this transaction did, so now it can really only get better from here haha. And thanks! Happy Holidays!

Originally posted by @Vincent Pace :

Congratulations and hilarious now that it's finally over! 

Yeah it’s funny now haha, when I was actually going through it I thought I was gonna explode from all of stress and anxiety that was swirling around in my head. Definitely glad that that’s over!

Originally posted by @Paul Camuto :

Congrats on purchase. This is a big success buying a multi unit as your first. Any photos to share? As you get more comfortable you fill find attorneys can be done without. Build a relationship with your agent if you want to work together again, they can even give you some rebates for partnering together. I be curious to know the cash flow and cap rate, I didn't see much on the financials.

 Hey how do I add pics?

Congratulations Gina! Thank you for sharing your experience and that very entertaining post. I enjoyed reading it a lot. I have yet to purchase my first property but intend to do so in 2018. Your post certainly helped and inspired me as I was having some doubts and fears that I may not find the right property, so thank you and congratulations again and good luck on your real estate journey!

@Gina Clarke congratulations on your first of many.  No matter how many times you do this, you will find yourself getting very frustrated with the parties involved to make sure you close.  Being that this is a 3 family, did the seller provide you with a Green Card (certificate of inspection) from the state?

Originally posted by @Criselda Ilao :

Congratulations Gina! Thank you for sharing your experience and that very entertaining post. I enjoyed reading it a lot. I have yet to purchase my first property but intend to do so in 2018. Your post certainly helped and inspired me as I was having some doubts and fears that I may not find the right property, so thank you and congratulations again and good luck on your real estate journey!

Hi Criselda,

Sure np, I’d love to be of help and offer any advice that I can. Definitely keep in contact, and Happy Holidays!

Originally posted by @Ray Reed :

@Gina Clarke congratulations on your first of many.  No matter how many times you do this, you will find yourself getting very frustrated with the parties involved to make sure you close.  Being that this is a 3 family, did the seller provide you with a Green Card (certificate of inspection) from the state?

 Hi Ray,

The seller didn’t provide the green card because she didn’t pay for it. I called the DCA and they assured me that everything was abated and taken care of (this is an old home) the seller just didn’t pay the necessary fees. This was also a part of our agreement (as well as me having to get the CCC and fire inspection done). 

@Gina Clarke glad to hear everything is ok as far as the state inspection. I had a similar thing happen to me last year. inspections passed but prior owner didn't pay the fee.  I told the state i would pay the fee but they pretty much deterred me since everything passed. so you have a few years not to worry about them. keep up the hard work. 

Congrats funny and inspiring story!! Can’t wait to share details of my first purchase!!

Super congrats, I know the feeling. I'm happy you made it through. Good luck the rest of the way.

Awesome! Happy to hear you pulled it through!

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