Closed on my first rental property!

2 Replies

Hello BP,

I’d like to thank everyone here, you guys are my support network. I’ve learned a lot, and I apologize for all the crazy questions. I also want to give a shout out to @Jdmartin (for some reason I can't tag him), and his bizbrainstormerz website, where he helped me through the process.

I bought a distressed home in 2017, I remodeled it to a point where I could take out a HELOC, and then used that for a down payment on this rental property. I am really proud of myself considering its a tough market in my area, especially for rentals (for what I could afford). I was on the market like a hawk though.

Im not sure if I got lucky, or if I just happened to be persistent. Here are the details:

List price - 260k

Offer - 240k

Counter - 258k

I held my ground, sent back the same offer with an extended amount of time to make a decision, as well as pushed out the P&S another week (I knew the court system would like this) and they came back at $242500.

Purchase price - $242500

Estimated rehab costs - 5k

ARV - 285k

Mortgage PITI - $1376

HELOC payment - $390

Rental income - $2600

Cash flow (Prior to refi) - $734 

Cash on cash return - 15%

I need to fix up one unit as it is very outdated, the other unit is already remodeled. I give myself a month to get this done. Then refinance after 6 months to pay off the majority of the HELOC.

Im just starting out in my RE investing career, so I have a lot to learn. But I have listened to many audiobooks, I come on here and take everyones advice to heart, and I try and help you guys as much as I can. I feel like I have a little more to offer now. Its really cool to set goals, and see them transform. Not everything has happened according to plan. But that the beautiful thing about RE, there are so many avenues I can choose.