What was your first purchase?

Multi-Family and Apartment Investing

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What was your first purchase?

Charlie Anne

Member since 2020 · 89 posts · 45 votes

My goal is to buy 1 rental property this year. Tell me about your first purchase!

Where was it?

How did it go?

Do you still have it?

1 thing youwish you knew?

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Corey Hawkinson

Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes

My first investment property purchase was a 3 bed, 1 bath condo for $49,000. It was a foreclosure. It has gone very well. I have owned it for 8 years now. If the right opportunity came I would consider selling it and doing a 1031 exchange. However, it cash flows very well (mainly due to the purchase price) which means that I'm fine holding it longer.

It is located in Newport, MN, which is south of St. Paul. I can't think of anything that I wish I knew at the time. I'm glad I made the decision to jump into real estate investing. I wish that I was more aggressive over the last 8 years both in terms of expansion and how I handled the properties I have owned. I have been too relaxed about increasing the rent amount.

Now I am at a point where I have to decide how to expand. I have 7 "doors" now.

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Corey Hawkinson
Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
6y
My first investment property purchase was a 3 bed, 1 bath condo for $49,000. It was a foreclosure. It has gone very well. I have owned it for 8 years now. If the right opportunity came I would consider selling it and doing a 1031 exchange. However, it cash flows very well (mainly due to the purchase price) which means that I'm fine holding it longer.
It is located in Newport, MN, which is south of St. Paul. I can't think of anything that I wish I knew at the time. I'm glad I made the decision to jump into real estate investing. I wish that I was more aggressive over the last 8 years both in terms of expansion and how I handled the properties I have owned. I have been too relaxed about increasing the rent amount.
Now I am at a point where I have to decide how to expand. I have 7 "doors" now.
11 Reply
Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
I bought a duplex in College Station, Texas in the fall of 2005. Each side was a 2/1. I paid $96k. I used a 100% financing with a VA loan with a 6.5% interest rate. At that time, it seemed like a great rate. I had a 3% seller concession, used 2 negative points and received a rebate from my agent through a USAA program, so I actually received a check $1,500 at closing (those were the days). It was basically move in ready.
I lived in one side with a roommate and rented the other side. I lived there for free for a year and a half, and then moved out and hired a professional manager. My rent grew pretty quickly, so by that time, it cash flowed decently, considering I had over 100% financing. I sold it in 2009 for $118K. I wish I had kept it, but it was a point in time that I really needed the cash.
I wish I knew not to do my own plumbing work. I had a leaky tub fixture at one point, and I broke the pipe in the wall trying to remove it. It took me too long to figure out how to shut the water off at the street, so I flooded everything. That was an expensive lesson. I like working with paint and wood, but I now leave all the plumbing, electrical, and HVAC to the pros.
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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
6y
First investment property was a 3/2 sfr in Hampton, GA. This was in 2011 and properties were selling for about 30 cents on the dollar in that area. It took us two years to get it rented because it needed a major renovation and we (spouse and I) were very busy with our full time job. I wish I had purchased more properties at that time. I knew they were cheap but we didn't have the additional finances to acquire more. We still have it and still the same tenant.
1 Reply
Adam TafelBusiness Member
Real Estate Agent · St. Paul, MN · Member since 2017 · 580 posts · 396 votes
6y
2/1 SF in West St. Paul. Purchased for 135k, FHA, in 2015. Absolutely crushed it on Airbnb for 3.5 years, but those returns aren't as great as they used to be. Still cashflows well, and has appreciated significantly over the past 5 years. Considering selling to get into more MF investments.
What do I wish I knew? I would have done a few more updates and repairs before renting. It's easy to get things done when a home is vacant, and can be a pain with tenants and furnishings. I used to kick an extra $1000 towards my mortgage every few months, which wasn't a great strategy at 4.5% interest. Better off having that money in the stock market or cash for future deals. I also would have used my FHA loan on a bigger/more expensive 3-4 unit property, although I have no way to prove that this would have generated a bigger return. For a tiny house in a B-class neighborhood it's been a phenomenal investment!
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5 Reply
Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
3/1 single family in Cincinnati for $20k in 2011. It was a foreclosure that took another $15k to get rentable.
Thankfully it does well and still own, but have lots of equity.
One thing I wished I knew: how reserves really work. Everything in real estate has a useful life and a cost to replace. Roofs, HVAC, water heaters, kitchen appliances, exterior paint, decks, etc. Even if they are new today, you will have to replace them. My cashflow numbers do not look nearly as good after 9 years, as I thought they would because these things cost money, and lots of it. A recent, easy roof cost my $6k. Granted that is a once every 30 yrs expense, but if you only cash flow $100/door on a single family, that is five years of profit gone.
8 Reply
Jeffrey Tang
Houston, TX · Member since 2018 · 3 posts · 3 votes
6y
My first rental property was a 3b/2b built in 1978 that I bought for $144.5k. I put 25% down on a 30 year fixed conventional loan at 4.5%. Rented it out for $1430/month and cash flowing $399/month after capex/vacancy/repairs/mortgage/insurance/HOA.
The process was a bit smoother than I expected since I did get the guidance from many experienced friends along with doing my own studying. It did take a bit of time to find this property since I was strict with my numbers, so patience is key.
I still do own the property and looking to get more!
One thing I wish I knew more about was repair cost. Even though my first property only needed under $800 in repairs, I definitely felt out of my element in this area. I've been studying on my own time and talking to more experienced investors on this area to become more knowledgeable
Good luck on your first purchase!
3 Reply
Erica Osborn
Investor · Tucson, AZ · Member since 2015 · 103 posts · 97 votes
6y
3/2 SFH in Omaha NE, in our neighborhood in 2011. It was a foreclosure, we were going to fix it up and rent it out. It was a very old home that had been moved and placed onto the current basement that it was sitting on, so the house was older than the foudation and basement. It previously was a duplex, but we saw it as a SFH. Bought it using a regular convetional 25/75 LTV loan and fixed it up with our own money with no intention of BRRRR (I didn't know what that was then). We fixed it up, rented it out ourselves to college students (then the military sent us away), placed property management on it, held it for a few years and cashflowed about $300/m. The tenants eventually moved out and we discovered they had not told us or the PM about an ongoing plumbing issue in the basement bathroom, which leaked into the whole side of the basement each time anyone took a shower in that basement bathroom. Now, picture this...the house was vacant and needed a large repair, we are distance property owners, so we took a trip up to NE from FL, demo'd the basement ourselves, and had professionals come and correct the plumbing leak. While trying to figure out what to do next either renovate and sell, or renovate and hold we received a post card in the mail from an investor wanting to buy it, we were in FL both working in over full-time careers and didn't want to deal with the renovation, so we sold to that investor and walked away with a few thousand dollars. Lesson here for everyone else: MAIL CAMPAIGNS WORK! :)
What I wish I knew: Reply on professionals from the get go, trades, contractors, and property managers. If property management doesn't interest you....trust that because you won't do a thorough and good job! I should have had property management place the tenants and do the screening from the get go. It took 3 months to finish and get tenants in there when we could have paid a professional and had it done in 1 month, the costs would have washed and we wouldn't have stretched ourselves (timewise) to thin. I should have left it a duplex! What I know about small multis now......this would have changed the whole outlook for that investment. I didn't know anything about small multis then. I wish I would have taken on the renovation and flipped the house. The investor who paid me a few thousand in profit then made a nice chunk for herself.
So many lessons learned!!!!!! The school of experience is where I've learned the most and unfortunately the bad times teach you way more than the good times, so pay attention and do not be afraid to share your lessons learned with others, they are your battle wounds and they make you stronger and better!!!...and sometimes the stories are just plain funny!
6 Reply
Chad Stark
Rental Property Investor · Member since 2019 · 36 posts · 29 votes
6y
I purchased two turnkey properties in Kansas City 2 years ago. I am happy with my purchases and plan to buy another this year.
1 Reply
Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
6y
My first purchase was a 4-plex in Phoenix, AZ in 2014. I still own it.
I have done two cash-out refinances on the property and pulled out $110,000 in equity. I used that money to purchase more real estate.
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7 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
6y
4 bed, 1 bath vacant house for $60k. Did all the work myself for about $15k and rented it for $1350. Refinanced a few months later for $90k.
Still own it.
3 Reply
William Walker
Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes
6y
3/2 SFH purchased for 134k in 2015. 20% down. Initially rented for $1,250 and now at $1,400. Did a cash out refi in 2019 at 190k but with 25% down (I should've shopped the refi more). Still got more cash back than what I put in to it, 25% equity, and rented. Only problem is with the refi my payments went up so cash flow is minimal.
2 Reply
Ray Johnson
Irvine, CA · Member since 2016 · 545 posts · 614 votes
6y
@Charlie Anne My first property is a 1 bedroom condo I bought in Santa Monica, CA in 2003. I bought it to live in while I finished college, instead of renting an apartment. I still own it, It's going well, it has more than tripled in value. I'll keep it forever, and make sure one of my children do as well.
2 Reply
Layne T.
Investor · Ft. Lauderdale, FL · Member since 2019 · 71 posts · 50 votes
6y
3/2 Rental in Indiana a few years ago. Still have it, and one important lesson that may not be emphasized enough in this thread is a great property manager will make or break you, especially with an out-of-state rental.

My mistake - went for the cheapest monthly rate for property mgmt company. What you think you'll save, you'll end up paying in excess repairs/maintenance, especially if they charge mark-ups and you have no transparency on actual cost to handle the repairs. Communication will seem like a chore.

After a year, I went to another prop mgmt company that charges a higher rate (it's minimally higher), and couldn't be happier.
1 Reply
Joe PrillamanPro Member
Rental Property Investor · Carolina Beach, NC · Member since 2017 · 441 posts · 462 votes
6y
My first property was a 3/2 single family, brick ranch home in Fayetteville, NC. This was a BRRRR property using delayed financing. The deal went great and I still own it. Total project cost about 60k and property appraised for 80k with a $900 per month rent. I still own the property and I wish I had started sooner! I wish I had replaced the HVAC instead of waiting so I could have wrapped the new one into the original refinance.
2 Reply
Dillon Dale
Real Estate Agent · Owatonna, MN · Member since 2017 · 221 posts · 152 votes
6y
House hacked a duplex. Purchase price of $205k, 15% down conventional (property did not meet FHA standards). The tenants that were in place when I started the purchase agreement were both evicted before closing. They left a huge mess behind, which was not cleaned up before I bought it. I went in and renovated both units right away. I went way over my budget but did most of the work myself. Rented the upper unit for $1000 and lived in the lower unit. A year and a half later, we have a new tenant in the upper for $1225, we moved out and have a tenant in the lower for $1450. Property is now worth $290k. Trying to pull equity out as we speak and repeat.
Lessons: be ultra-conservative with your rehab budget. Luckily, this didn't ruin me, but it was very uncomfortable for a while. Plan for a worst-case scenario
4 Reply
Kimberley Lee
Member since 2020 · 10 posts · 2 votes
6y
My first property was a small house in Denver about 5 years ago, I still own it and I am renting it. The first year I moved there, had some works to do, but then came back to Memphis, where I am living now.
0 Reply
Caroline C.
Investor · Jacksonville Beach, FL | NYC | Tamarindo Costa Rica · Member since 2014 · 182 posts · 130 votes
6y
@Charlie Anne first investment purchase was a single family home in Asheville NC in 2006 - we sold it in 2011. We were still fairly inexperienced at that point, and when the tenant moved out, the rental market was a bit soft and we would have had to lower the rent. Also we had spent a lot of money remediating a mold issue a year before. Also, we had a shared driveway with the neighbor, and they stored all kinds of junk on their lawn. So afraid it would be a money pit and difficult to rent, we panicked and sold. We were only able to break even with the sale because the market had tanked after 2008 and by the time we sold in 2011, prices had just gotten back up to 2006 levels.
The thing I wish we had kept front of mind back then was that buy and hold is a long term investment, so while we went through a rough patch with the mold issue and potentially lowering the rent, if we could have been patient, we'd current be enjoying years more of equity paydown, and significant appreciation, both in monthly rental price and value of the home.
4 Reply
Daniel Guerra
Investor · Greater Chicago Area and Northwest Indiana · Member since 2018 · 138 posts · 42 votes
6y
@Charlie Anne
Hammond, Indiana
Awesome. Bought for 50K, Rehab 30K, Sold for 135K.
No, I do not have it.
I wish I knew about Real Estate when I was younger.
2 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Corey Hawkinson congrats on 7 doors!
0 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Daniel Guerra that’s a great return! I wish I had considered real estate earlier as well.
1 Reply
Marlen Weber
Specialist · Plano, TX · Member since 2020 · 2k+ posts · 861 votes
6y
It's great reading about others' experiences on their first investments. Keep them coming.
0 Reply
Heather Schmidtknecht
Rental Property Investor · Winona, MN · Member since 2018 · 87 posts · 90 votes
6y
@Charlie Anne, my first purchase was a SFR two years ago and I am so glad I bought it. It's a 3-bed, 2-bath home and it was nicely updated/maintained when I got it and I have no problem renting it, as this seems to be a desired size for families in this Minnesota college town — many of the other rentals are in poor shape and marketed to students, as the landlords of those properties make a little more charging by the room (but then they have to turn them over every year, too).
I bought my second rental last summer (same size but on the other end of town) and am in hot pursuit of another now. Here are a couple things I’ve learned the last couple of years:
1) Write into your purchase agreement that you can show the house to prospective tenants once a week. I did this for my second property and had a signed lease the day I closed and took ownership.
2) When negotiating a final purchase price for my second property, the sellers gave me their lowest acceptable number. I knew I couldn’t make those numbers work with the rent I was anticipating, so I placed a dummy ad on Craigslist (no pics, just a description) for the rent I would have to have to make the sellers’ numbers work (just to see if I would get any bites)... and I did!
3) Finally, I listen to the BP podcasts and recently heard the tip of contacting “for rent” advertisers and telling them that I’m not interested in renting, but wondering if they’d be interested in selling... this really works! I recently put a post on Facebook, asking “Are you tired of being a landlord?” and saying what I’m looking for — I got a couple of leads and I’m going to see one over lunch tomorrow! :)
8 Reply
Ana Marie B.
Rental Property Investor · SF Bay Area, CA · Member since 2015 · 206 posts · 156 votes
6y
My 1st investment was a 3 bdrm/ 1 ba single family house purchased in 2010 for $460k in South San Francisco, CA. Property is now worth around $900k - $1M and rents for $3600/ mo. Cash flow is $1400/ mo.
4 Reply
Patrick Menefee
Real Estate Coach · Charlotte, NC · Member since 2016 · 399 posts · 341 votes
6y
My first property was a fourplex in Gastonia, North Carolina (just west of Charlotte). It was fully occupied but underperforming, and after sitting on the market for a few months I got the seller to come down from $210k to $160k.

How did it go? Truthfully it was a pain in the @$$ and I'm so thankful for it. The contract and closing process ran into problem after problem and was delayed 6 weeks; I had a cheap property manager who was nearly as bad as having to manage myself; I had to evict 3 tenants, one of which my said property manager lost; and my rehab has been headache after headache, to include having a city inspector involved
The rehab is still in progress (hopefully to be complete in the next few weeks), and since purchasing this property I've closed on and stabilized another 8 units. But through this process I've learned so much about every aspect of investing, from due diligence to managing property managers to handling a rehab, and the best part is despite all the problems I'll still cash flow wonderfully!
I go into a lot more depth of the headaches related to the acquisition in my Deal Diary post, but it's been a great learning experience!
4 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Heather Schmidtknecht great tips! I’m saving these for later :)
0 Reply

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