POLL - How Did You Come to Own Your First Rental Property?

John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

9y

OK...I voted. Interesting results...but NOT surprising.

Xeniya McBroom

Real Estate Agent · Tampa, FL · Member since 2016 · 57 posts · 19 votes

9y

Voted! I think only 3 people voted so far. I almost bought mine with a conventional loan, but they failed to deliver after 3 months of back and forth, and my deal was saved by a private lender!

John Newhall

Real Estate Agent · Bloomington, MN · Member since 2015 · 87 posts · 30 votes

9y

My first rental was a primary home I bought right out of college. I had 2 roommates when I was living there and when I had to relocate for work I rented out my old room.

https://youtu.be/LLYflheh1wI

Jon Klaus

Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes

9y

I chose other, as I assumed a mortgage. Though not strictly a rental, here's the video:

It's hard to believe it's been 6 years since I posted this video.

Jack B.

Rental Property Investor · Seattle, WA · Member since 2014 · 1k+ posts · 1k+ votes

9y

I kept my first house that I paid cash for in my twenties after moving out. Liked the experience overall, decided to do the same again after moving out of the second house that I had mortgaged. At this point I learned the power of leverage. Now I own a few rental houses and am looking at exchanging them for a large apartment complex.

6 Reply

Joshua D.

Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes

9y

@Scott Trench

Thanks for doing this stuff! This will be helpful information long term.

Podcast Guest on Show #223

Scott TrenchPro Member

OP

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

9y

Special shout-out to @William E. for giving me this idea in another thread.

3 Reply

Account Closed

Real Estate Investor · Shelton, WA · Member since 2013 · 369 posts · 639 votes

9y

6 SFH taken Sub2 from one seller all at once. Talk about a steep learning curve!

Michael Le

Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes

9y

Seller financing but I don't see it listed so I chose Other.

Kurt K.

Rental Property Investor · Phoenix AZ / Kendallville, IN · Member since 2016 · 293 posts · 149 votes

9y

I inherited 14 rentals at once this year without any kind of real estate experience, so it was an eye opener for me.

Sylvia B.

Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes

9y

From the thread title I thought you wanted the story of how we acquired our first rentals, so I was surprised by the poll. What you really want to know is how we paid for it.

Benjamin M.

Investor · Tacoma, WA · Member since 2016 · 9 posts · 8 votes

9y

3.5% FHA

Derek G.

Investor · Toney, AL · Member since 2015 · 49 posts · 64 votes

9y

I married Satan back in 2007. After the divorce, she kept the house. Later on she walked away from the house and the mortgage payments and stuck me with it. I guess Hell had better real estate in a warmer climate.
I asked my real estate agent what my options were. His property management company handled the rest and I became a landlord. I have since acquired 2 more properties and am looking for more!
Thanks Satan!!!

37 Reply

Aaron Abraham

Investor · Inver Grove Heights, MN · Member since 2016 · 29 posts · 20 votes

9y

Bought a house for my wife and myself to live in. We received a $7500 tax credit, so we used that to buy an investment property. It was a good deal. I had to pay back that 7500 a few years later but I made that back ten fold when I sold the property.

3 Reply

Brent L.

Flipper · Lake Wylie, SC · Member since 2016 · 9 posts · 6 votes

9y

Well, also doesn't allow for a mix... I bought mine using 10% down and conventional while in school but rented out some rooms while living there and then also kept after mov no out.

Ronald PerichPro Member

Investor · Granite City, IL · Member since 2014 · 658 posts · 301 votes

9y

@Derek G. - You made my day. Although I would never thank Satan for anything, I thank you for this amusing anecdote!

Derek G.

Investor · Toney, AL · Member since 2015 · 49 posts · 64 votes

9y

Anytime @Ronald Perich :)

Mike Warder

Investor · Arlington, VA · Member since 2016 · 80 posts · 39 votes

9y

5% down on a $50k condo in 2006. 7 year ARM 3.8% at the beginning. I lived in it through law school, paying the mortgage with student loans. Not the smartest idea at the time, but it cash flows and has doubled in value since.

Ronald PerichPro Member

Investor · Granite City, IL · Member since 2014 · 658 posts · 301 votes

9y

Mine is a story about putting it out there and "making my own luck."

In early 2015, I committed to myself that I was going to get in the game for real after about a year of study. Come June 9th, I officially made my first mailing to about 100 probate leads. It worked! I got two calls and one appointment off one mailing. But I didn't end up with anything. I stopped that marketing because I was simply too busy to work it (ready why below).

The one person wanted to give me six properties (including four empty lots), all I had to do was pay taxes. But the area was over 50% foreclosed and is really depressed. I wasn't ready for that. The second person wanted too much. They ended up listing and it sat on the market. I followed up, but no dice. They then did some light rehab and ended up selling on MLS for more than I thought it would go for fully rehabbed. That taught me a lesson. Good area will get you more money with less work. I should have offered more or different options. Never mind, cause I still got what I needed.

The second part of my marketing was to call agents. Naturally, I started with the ones I knew best. On my second call, the agent told me she just picked up a listing that hadn't hit the market and the bank was really pressuring the owner to sell. She was facing foreclosure. Oh, and she owed a lot in back taxes.

I ended up purchasing two fourplexes, one of which had a studio apartment attached to it. Got a great deal on it, but I needed to seriously update both the residents and the residences.

Closed in August of 2015. We just did a cash-out refinance this month and pulled all of our initial investment out. We haven't made a dime on it from a cash flow perspective because that's how we paid for all of the renewal activities.

From this point forward, our cash flow pencils out at $1200/mo+ after all expenses and mortgage payments. We still have three units to renew. The cash out refi gave us plenty of extra money to cover that CapEx and to look for our next opportunity.

Take Action! Make your own luck!

8 Reply

Bill Gulley

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

9y

Looks like most started as I did, house hacking owner occupied and moving out. :)

John Ford

Rental Property Investor · Atlanta, GA · Member since 2016 · 85 posts · 49 votes

9y

Kind of would have liked to seen house-hacking vs simply "moved out". Just because the "move out" method seems to be the lowest barrier to entry for most (and how I got started) but it's one of the things I see mentioned least on BP. I always thought that was odd.

Kurt K.

Investor · in, MI · Member since 2013 · 226 posts · 102 votes

9y

Seller financed 6-unit MFH.... selected "Other"