Hi BP community - I just purchased my second property and I am excited to finally share the details of my first property.
Before I get into the details of the property, I want to remind everyone that not everything goes as planned and that you need to always move forward and not get stuck over analyzing or get discouraged because an offer was declined. Before I purchased this property, I had multiple offers declined, two deals that fell apart the week of closing (including one where it got messy and I almost lost my down payment).
Now for for the details of the purchase!
- 2 family
- 5 br 2 ba (2 br & 3br)
- 2426 sqft
- Purchase Price: $514,000
- Purchase cost: $35,842.79 (Including closing costs)
- Renovation cost: $17,409.44
- Total Cash: $53,251.79
- Financing: Conventional loan with 5% down (owner occupied)
- Closed May 2017
Since this was a owner occupied property, I lived in the unit with 2 bedrooms and I had a roommate for a couple of months before he moved out. Instead of finding another roommate, my girlfriend moved in with me and I decided to eat the costs to keep my business balanced (about $1000/mo out of pocket vs ~$200 when I had a roommate). I did refinance once about 6 months or so in and that helped me reduce my monthly payments by over $100 while costing me nothing out of pocket.
Fast forward a couple of months - I have another multifamily under agreement in June, with a closing at the end of August (woohoo!!). This was super exciting to me because this was my vision from the start. Before I even bought my first property!
Current Financials of the property:
- Unit 1: $1900 (previously $1400 from the last owner)
- Unit 2: $2500 (previously $1900 from the last owner)
- Mortgage payment: $3100 (Including PMI, taxes, insurance)
- Water: ~$70 (avg)
- Gas: ~$75 (avg)
- Cap-ex & repairs: $300
This leaves me with roughly $4400-3545 = $855 in cash flow/mo!
Cash on cash return: 19.27%
I have moved out of my first property and into the new one and this helps pay for my living costs. Hope this helps inspire some people!
@Kevin Lee congrats man!
Awesome work!! I'm so happy that you took the leap and are adding into your cash flow! It's nice to see that us millennials have the courage to take that leap and improve your lives and financial freedom. Thanks for sharing!
What do you think your next purchase will be? Three family? Are you planning on staying in the Malden area or expanding into other metros as well? I'm looking to expand my portfolio in Malden/Everett but haven't found that sweet deal yet! Currently own in lower income properties that cash flow but do not appreciate as rapidly ..
I’ll chime in, and congratulate you on taking action. It is often the most difficult thing to make those first offers.
congrats @Kevin Lee !
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