How did you find your first Deal?

Question

This is the question I hear the most. Everyone has a story to tell and I would love to hear yours.

Once you share perhaps someone else could have an "ah-ha" moment in order to find their first deal.

Victor Steffen · Answer

Was living in manhattan, searching FSBOs within a 3 hour radius of the city. Saw a 6 unit building in scranton pa. called the owner, asked him if he would carry paper, he said he would consider it, turns out he lived in the city too, we met for a beer that night, talked terms, drove to PA that weekend, shook hands on the deal, wrote up the note and mortgage and transferred title, hired a property manager... LEARNED A LOT. terms were sweet too. 90k purchase, 10% down, 30 year amortization, 6% interest, 24 month balloon. Property pulls in $4500 per month and the tenants pay all utilities.. he was motivated to get rid of it because he was self managing and had to move overseas to be with an ailing family member. I still laugh when i think about how it all happened and the timeline.

Kyle Kerekes · Answer

Like @Victor Steffen my first deal was in Scranton too! Freshman year of college a friend and I wanted  to try and wholesale a student housing duplex that was listed on Craigslist, we told two potential buyers about it and they wanted nothing to do with it. So of course we wanted to give up lol.

I had the crazy idea to borrow money from family to buy it. We negotiated from $300k ask down to $250k purchase, put about $5k into minor repairs and upgrades, held for 2 years at about $38k/year cashflow, sold for $285k.

Easily one of the best learning experiences of my life!

Kyle Kerekes · Answer

@April Munoz no need to apologize, that's a fair question!

As I said, I was partnered with a friend and we were in college at the time. Around the end of junior year, people started making us offers out of the blue. There was a lot of uncertainty about where each of us would be and what we would each be doing post-grad. After a lot of consideration, we decided it was our best choice to get rid of it with the idea that we may continue the partnership in the future, but if we did it wouldn't be in student housing anyway.

Looking back, I wouldn't have done anything differently. I'm glad we got out when we did. Sure we could've gone the route you suggested, but I still have no desire to be in student housing regardless of the typically higher cash flow because it was just a major pain in the neck. As you said, it all depends on the individual and circumstance :)

April Munoz · Answer

Thats Great! But let me ask. WIth a cash flow of 38K why sell? Could you not of just refinanced and used a home equity loan to finance another deal? That way you still get cash flow and continue adding to your portfolio. I am sorry if I come off too strong it's just these are the types of questions where the answer would vary depending on the individual and circumstances.

Looking back is there anything you would have done differently?

April Munoz · Answer

Thats one heck of a steal and this was your first deal. Talk about starting with a bang. Was this all self-taught or did you have a mentor help you during this transaction.

How did you find your first Deal?

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