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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Kyle Ebert
Queens, NY · Member since 2017 · 1 post · 0 votes
6y
@Chad Stark did you use a company to find your turnkey KC area houses? If so, would you recommend them?
0 Reply
Chad Stark
Rental Property Investor · Member since 2019 · 36 posts · 29 votes
6y
@Kyle Ebert yes I used a turnkey provider in Kansas City. I'll private message you their information
0 Reply
David McKelfresh
Member since 2020 · 10 posts · 5 votes
6y
My first purchase was a house hack. We live in Denver where prices are pretty expensive, so we bought a home that also had an ADU/Carriage House. Renting that out we saved a ton on our mortgage so we could buy additional properties.
Good luck!
0 Reply
Matt M.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
6y
My first investment was a 3/1 1/2 duplex/double foreclosure in Bangor, Pa In Dec 2015.
Could not get lockbox code from listing realtor, was an online auction. I won the auction for $21k with only seeing thru first floor windows. Next day got lockbox code and my realtor got a call from listing realtor that the least BofA would take was $23,100. Got inside and gladly paid the $23,100. I rehabbed the house in 2 months, spent $15k, and turned it into a 3/1.5. Rented it for $995/month, and rented the huge 2.5 car garage for $185/month. Today it is rented for $1100 and garage for $125. $1225/month on a $38k investment. Winner winner!
I ended up buying the other half this past April for $40k, rehabbed for about $14k, invested $54k, rented for $1175.
2 Reply
Colt Savage
Civil Engineer · Tacoma, WA · Member since 2015 · 15 posts · 8 votes
6y
My first property was purchased in 2014 for $240,000. It's a SFH with a MIL downstairs. The day after I moved in, one of my buddies moved into the MIL Suite downstairs and is still there to this day (April 2020). It's been a win-win for my buddy and me. He's been constantly living for 20-30% below market rents, and I've been able to create additional income with him living there. I moved out of the property in 2017 to purchase another property. As of this date, I'm residing in the property and in the process of doing a cash-out refinance on it and scheduled to close on 5/6. The appraisal came back at $445,000 which is about $205,000 worth of equity in 6 years. The upgrades to the house are: New windows, floors, doors, trim, carpet, and new kitchen. The cash-out money will be used to purchase additional properties and continue building the portfolio. Something I wish I knew when purchasing: I wish I would have bought a multifamily property. The SFH works but it makes much more sense to have a property that was built for multiple residency.
3 Reply
Anthony Vaiana
Rental Property Investor · Milwaukee, WI · Member since 2016 · 30 posts · 15 votes
6y
I purchased my first property last May here in Milwaukee, WI. I used a 3.5% down FHA loan to purchase a large side by side duplex, 2 bedroom 1 bath with separate full finished basements for $185k, in which I owner Occupy. PITI is $1,540/mo with PMI. I initially had to deal with Inherited tenants who were paying $850/mo each, and gave me all sorts of problems to start. It was not a pleasant experience...
But after getting them both out a few months later, I invested around $8k to do some minor rehab. Rented out one side for $1,250/mo and live in the other side and pay myself $1,100 rent to my LLC. Cash flow is about $360/mo, counting myself as a tent. From an owner occupy standpoint, I'm living here for less than $300/mo. One thing I wish I knew was properly estimating rehab costs before, rather than discovering things I needed to do as I went along. But to me it wasn't anything I could fully grasp without pulling the trigger and learning first hand. Second property went way smoother now knowing what to look for.
2 Reply
Jasmine H.
Rental Property Investor · Houston, TX · Member since 2014 · 139 posts · 140 votes
6y
I lived in my first home for years before I decided to rent it out. Around 05/06 when I started looking at houses, I couldn't afford anything in the Northern VA area. A condo at that time was starting around $300k. I was planning to move to Texas because they had huge homes for under $150k! In 2008, a year after I graduated from college, homes started to get reasonable and of course my parents were super happy that I no longer needed to move out of town to afford something. I bought my townhome in Manassas VA at $132k. It was a foreclosure and that area was hit hard not only due to the recession but also to the crackdown of illegal immigrants. I ended up renting it years later. It currently appraises at $265k but who knows what it'll be in a year or two with everything that is going on. I'm holding onto it as long as I can. I managed it as a rental for about 4 years before I passed it on to a property manager. It currently rents for $1775. I just called the bank today to see what the current refi quotes were for an investment. They quoted 3% disc and 1% origination for a 15 yr loan at 3.875%. I told her no thanks, I'll stick to my 30 yr loan at 3.75%.

One thing I wish I knew was what an opportunity it was to buy that home. I remember the townhouse next to us sold at $99k and looked down at it because it had roaches in the front exterior in the flowerbed. It ended up being scooped up by an investor and now can sell for about $240k. I wish I took that darn homebuyers credit and bought the one next to me, lol! But this time, I'm prepared to act fast and not miss another deal.
2 Reply
Craig Sloan
Member since 2018 · 200 posts · 123 votes
6y
@Charlie Anne my first deal was a fourplex in a little town outside of Ft. Wayne, IN. Purchased in 2006 for $31,000. Four 1 bedroom units. It has been a great property. Still own it. Wish I could still buy properties for prices like that! Wish I would have known more about how to market it back then. I have a much better idea now. Good luck with your property acquisition this year.
1 Reply
Kurtis Schreck
Member since 2019 · 8 posts · 1 vote
6y
Originally posted by @Chad Stark:
I purchased two turnkey properties in Kansas City 2 years ago. I am happy with my purchases and plan to buy another this year.

Chad - were you targeting a specific area in KC at the time? I moved away 2 years ago and am moving back next week. Excited to see the changes.
0 Reply
Jean Santiago
New to Real Estate · Chino Hills CA · Member since 2019 · 95 posts · 24 votes
6y
@Charlie Anne
Love this discussion and reading about everyone's story!
What a great question for you to ask!
1 Reply
Kyle Spearin
Real Estate Agent · Boston, MA · Member since 2016 · 446 posts · 214 votes
6y
@Charlie Anne great question! I started with a live in flip in Raynham, Massachusetts (south of Boston). I bought the ugliest house in a great neighborhood in a town with good schools. Since there were cosmetic problems and lack of updates, I was able to buy the house for $15,000 under asking. I redid the flooring, put in new windows, painted, did some landscaping, and rebuilt the kitchen. In total, I was able to sell after 2 years for $30,000 in profit. Since I lived there the whole time and did a lot of the work, I was able to get pretty decent profit and also received the homeowner tax benefits etc.
Good luck!
2 Reply
Raul R.
Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
6y
@Charlie Anne
First purchase was a 3br/2ba condo in CLT.
Purchased it 4 years ago for $62k it’s worth $110k now
I wish back then I knew what was a non-warrantable condo and how hard it is to find financing on those type of properties....
1 Reply
Chad Stark
Rental Property Investor · Member since 2019 · 36 posts · 29 votes
6y
@Kurtis Schreck I have one in 64131 and one in 64134. Both purchased under 100k. Both areas seem to have appreciated but most importantly I have held tenants in place.
0 Reply
Eric Johnson
Lender · Chicago, IL · Member since 2016 · 653 posts · 313 votes
6y
single family in chicago suburbs. sold it. cash flow was OK, I was to new and not that great of a deal. be conservative, especially if rehab involved.
1 Reply
Brock Mogensen
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
6y
My first purchase was a duplex, which I house hacked. It turned out great and I still own it. I always suggest to people that one of the best ways to start is through house hacking. That deal taught me the process and allowed me to grow my portfolio quickly after that.
1 Reply
QuoVadis Gates
Investor · Chicago, IL · Member since 2019 · 32 posts · 13 votes
6y
My first property was a multifamily house hack.
2 unit property my family and I lived in one unit and rented the other. We searched for 3 and 4 unit buildings, none of them made sense because they weren't where I wanted my family to live. so we settled on a 2 unit in the most desirable neighborhood on our list. It wasn't the 4 unit we dreamed of living rent free in but we paid half of what we would have paid in rent to live there so it made sense. We kept the building and still own it to this day.
PS.
I check the comps regularly and it has appreciated well, it has been a good investment.
2 Reply
Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
6y
@Charlie Anne 4/1 Single, recently rehabbed, rented to a family of 4 for $775.00 per month.. Purchased in 2015, same tenant, rent has gone up $115.00, they still pay on time, but were effected by COVID-19 smh..... I wish I didn't over pay for it. Bought it for $24,900 and it was appraised for $24,900. Owe about $16K left on it, mortgage payment P/I $110.00 per month. All the best to you.
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
6y
400 W Utica st Buffalo NY 14031 - bought it for $140,000 with a rent roll of $1225. Today it brings in around $3,000 and is worth $290,000. Still own it today and is been one of if not my best purchase.
Irish Jones Realty4.947 Reviews
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Collin Placke
Rental Property Investor · Denver, CO · Member since 2018 · 46 posts · 48 votes
6y
My first purchase was a single family BRRR in Fort Worth, TX. $90k purchase price, $30k rehab, appraised for $170k, rents for $1395/mo for a cash flow of $240/mo after expenses. Still own it, no reason to sell!
What I learned: Single family is great if time is on your side and you want 100% control of the deal. For me, the 2.5 months it took to purchase, rehab, refi, and place a tenant proved to be a little too much of a distraction from my full time W-2 job. Also, it didn't seem scalable enough to reach my cashflow goals within my timeline, so I switched to investing in large multifamily deals.
Becoming a passive investor allowed me to not lose focus on my #1 income source (W-2) while still reaping all the benefits of real estate investing. Sure I had to give up a little control, but I found some experienced multifamily investing teams with proven track records who I trust to manage my investments properly. After making a few passive investments, I was able to bring value to the team and join the General Partnership on a few acquisitions without too much time or focus taken away from my W-2.
My advice: Real estate investing is playing the long game, don't lose focus of your #1 income source because you are excited about real estate investing right now. If you make good money doing something you enjoy but still want the benefits of real estate investing, focus on 2x/3x/4x your main income source and investing that extra cash in passive real estate investments.

I know I will get yelled at by some folks on here due to my views on passive vs active investing... but I'd rather see someone focus on becoming better at what they're already good at, increase their current income from that, and invest the extra income passively in professionally managed commercial real estate instead of taking focus away from their #1 income source in order to learn how to invest in real estate only to get burned on both fronts.

If you can actively invest in real estate while not only maintaining, but growing your #1 income source, then more power to you and continue crushing it!!

3 Reply
Ivan Terrero
Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes
6y
I bought an empty lotfor $4,900 in Cape Coral, Florida sight unseen in 1994. Built a house, rented out for 2 years. After the tenant moved out I sold it rent to own, never should have sold it.
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Account Closed
Attorney · Sacramento, CA · Member since 2014 · 300 posts · 172 votes
6y
2/2 duplex in Sacramento that we house hacked for 2 years! Fixed it up and moved out. Learned so much about landlording! Great experience.
0 Reply
Account Closed
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
6y
I was 19 and my boyfriend was 20. We were renting a cute but run-down cabin on a creek in WA. Our landlord asked us if we'd like to buy it. I forget the purchase price, but we agreed to give him $2,000 down. We were both working for the Forest Service and making decent money during the fire season with lots of overtime and saving our money.

One of the ceilings fell down completely in one of the bedrooms. I can't remember if this was before or after we "bought" the cabin. Actually, it must have been at the same time we told him about the ceiling collapsing, because I know we lived in it with the 2nd bedroom unusable until we moved out

Turned out he scammed us completely. The cabin was in a vacation home development with a HOA and it was not allowed to rent them out or even to live in your cabin year-round.

So, we got kicked to the curb and lost our hard-earned $2,000. This was in 1976 or so, and the minimum wage was around $1.50/hour, just to give the $2,000 savings we lost a point of reference. It never even occurred to us to sue. We didn't have money for a lawyer.

What did I learn? Don't invest in real estate without an education. I moved from that tiny town in rural southern WA to Seattle and went to college and studied real estate before attempting to buy another property.
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Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Account Closed wow what a crazy experience! How has investing been going since then?
0 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Ivan Terrero have you bought empty lots since? That’s an interesting strategy I hadn’t considered.
0 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Daniel Rasmussen that’s good advice, thank you!
Have you find that most “turnkey” rentals have a similar cost to get rental ready?
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