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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Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Chad Stark can you message me the turnkey provider in KC as well? Thanks!
0 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Matt M. what a great deal! Congrats!!
1 Reply
Daniel Rasmussen
Property Manager · Los Angeles · Member since 2019 · 16 posts · 6 votes
6y
@Charlie Anne based on what I have seen, people tend to have different definitions of what turnkey quality means.
For some people it’s a complete renovated interior with state of the art appliances and top notch finishes for a higher quality product. For others it simply means making sure the bones are good and it’s in a fresh but basic rentable condition. I found it’s easier to avoid as big of a premium in purchase price if you’re not paying for all the high end shiny bells and whistles with the finishes.
Now keep in mind, I’m in a C neighborhood where the quality of tenants, homes, etc. is much lower, and therefore the price and expectation of the product from a tenant perspective is much lower as well.
The surrounding market and comparable rentals should determine the quality you should be expecting from a turnkey provider and what price point you should be comfortable with as well. Hope that helps!
0 Reply
Account Closed
Investor · Leander, TX · Member since 2016 · 296 posts · 402 votes
6y
April of 2016 a 1975 construction, motivated home owner, 3 Bed, 2 Bath, 1 Car Garage, 1,200 SQ. FT. split level SFH with a metal roof in the Pinson, Alabama area, near Turkey Creek, asking price $70K.
I paid full price, got a 30 year fixed conventional loan at a 4.25% interest rate with 25% down.
Rehabbed the property around $10K, had it on the market by mid May to rent at $875, first application received less than 2 days later, processed, and that tenant is still in the property to this day, and has communicated that she loves the property and wants to stay there for a long time. My PM communicates to me that the tenant takes very good care of the property (music to my ears a tenant who wants to stay long term and cares for the property.)
Today the rent is $905, the home's value has grown to $110,000 (I still owe $48K), property taxes $1,129
BEFORE REHAB
AFTER REHAB

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Dell J.
Member since 2010 · 210 posts · 158 votes
6y
it was a single family. Still own it. It wasnt the best deal but it did get me started. I feel I could have negotiated a better deal. I was too caught up in the excitement of the offer process and the fact I could buy a house. Have the house about 10 years now. It has had the same tenant the whole time. I will never sell it. it has sentimental value because it was also my first rehab project.
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Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Account Closed the rehab looks great - thanks for sharing! I love seeing before + after pictures. Never gets old.

I’m thinking of buying a house with very similar numbers.
2 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Daniel Rasmussen makes sense! I suppose I think turnkey means fresh coat of paint or minor fixes. It does come at a premium.
1 Reply
Ujwal Velagapudi
Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes
6y
An all brick 3 unit commercial retail strip in the city of Detroit for $20,000 cash. 2 units occupied, and the other ready to rent. Long time owner occupant looking to retire and move was the seller. My second tenant left after a brief while, and it took a few months of trial & error to get the now 2 vacant units occupied. It took about 10 months from purchase to have a fully occupied building, and they have never left. I sold just last year. It was a very high cash flow building, only capex costs were partial roof maintenance jobs and 1 boiler, the rest my tenants had taken care of. I would have to hand hold one of my inherited tenants through numerous permits and city office applications that he needed to get through. We had a few break ins that the tenants had dealt with. I ended up having a painter come and draw a huge mural (40' x 18') as it was on a busy street, just to liven up the place. It ended up being a great purchase, nearly quadrupling in value upon sale and cash flow that had funded my next purchases.
Something I learned - don't go trying to accommodate every prospective tenant's schedule and show the unit after sunset. It will lead you to getting a flat tire in the terrible Michigan roads and stranded for a couple hours in a not so safe neighborhood.
1 Reply
Todd Powell
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
6y
@Charlie Anne. My first but and hold RE investment was a old run down triplex near OSU college campus. Paid $193k and it was listed by owner for $250k. I took a conventional loan with 25% down for 30 years, and bought it in 2007. Kept this until 2012 and then sold it by owner for $300,000. It cash flowed well, but it was built in 1900. The next deal was same 1900 old triplex near campus in 2007, and then a 1914 4 plex.
One thing I wish I knew was buy sooner and passed on deals which were great out of fear. I wish I would have scaled up faster, but today I am blessed to manage 16 doors personally, and partner s on a 8 plex and 72 unit campus property. It has worked out.
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Chris Herrera
Real Estate Agent · Addison, IL · Member since 2015 · 185 posts · 88 votes
6y
I bought a 4 unit a year out of college in a Chicago suburb in 2016
It was a huge learning experience since I spent all day every day rehabbing the unit I was going to live in when I wasn’t working.
I still have it today and it was the best teacher I could’ve had to begin my RE career.
One thing I wish I would’ve done different networking. I thought I could do everything myself and didn’t want to ask for help or go to networking events and by doing that I ended up not getting another property for 3 years since I only relied on my savings.
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Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Chris Herrera amazing that you bought a place 1 year out of college!
0 Reply
Charlie Anne
OP
Member since 2020 · 89 posts · 45 votes
6y
@Todd Powell that’s inspiring! Wow 72 units.
0 Reply
Jon Hill
Real Estate Agent · Firestone, CO · Member since 2018 · 124 posts · 115 votes
6y
@Charlie Anne that is a great goal. I have a similar one.
My first property was a 2 bed 2 bath townhome in Thornton Colorado. It was a pre-foreclosure that we were able to purchase for $150,000. It had appraised for $165,000 which was paid for by the previous buyer that they were under contract with.
It went pretty well as we were able to do a quick close. The plan was to make it a live in flip without the sell and move it to a house hack. After about a month of work we were able to get a roommate in it. It cut our monthly expenses in half.
We do still have it and have transitioned it to a long term rental. Because of how cheap we bought it the property is able to cash flow a little over $100 a month which is a bit below market rate.
The thing I wish I knew was how valuable fixing everything in the property all at once when we first bought it would have been. By no means have you had a lot of expenses come up, but knowing how much more work we need to put into it while there are tenants there is a challenge. I wish we would have wait a bit longer before moving in to ensure we got everything to be almost brand new.
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Account Closed
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
6y
Originally posted by @Charlie Anne:
@Account Closed wow what a crazy experience! How has investing been going since then?

Oh gosh, several purchases, all but one I made money on, and that was a long-distance home I'd lived in and then hired a PM to manage for me after I moved many states away, which didn't work out. The original purchase was a good one, though. Learning real estate law and how to analyze a good deal, doesn't teach you about unscrupulous PMs.
How about you?
0 Reply
Alex Olson
Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes
6y
Originally posted by @Charlie Anne:
@Account Closed the rehab looks great - thanks for sharing! I love seeing before + after pictures. Never gets old.

I’m thinking of buying a house with very similar numbers.

@nathan Brooks is the person who has some turnkey in KC. Be careful with any turnkey provider and the leases that are on these properties and how much incentives they gave to the tenant to move in at that lease rate. Hope that helps! Let me know if you need anything on MF in KC.
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Richard Dale-Mesaros
Investor · Campton, NH · Member since 2010 · 285 posts · 143 votes
6y
My first property was a 6-unit in Ashland, NH we bought with owner financing from some investor dudes who acquired it at auction. We refinanced them out after 18 months, did a wholesale deal on a separate 6 acre lot that they owned next door, making $11k after a double closing, then sold our building a year later for a $100k profit before taxes. One thing I wish I knew was that our attorney's suggestion to do a 1031 exchange into more properties was perhaps a little early in the game for us and we'd have been far better off paying off the $70k we owed on our house at the time and used the small amount of cash left over to creatively acquire another building. Instead we rushed into some questionable replacement properties due to the short time window allowed in the exchange, none of which were particularly easy to rent or sell!
0 Reply
Steven MayBusiness Member
Real Estate Agent · Kansas City, MO · Member since 2018 · 262 posts · 250 votes
6y
@Charlie Anne
Kansas City, MO
3 bed, 2 bath 1300 sq foot home built in 2009 with a unfinished basement and a large vacant residential lot next door
House hacked it for a year while making some updates
Now my house hack roommates are moving out and I’m putting tenants in it for about 150$/MO cash flow after accounting for reserves. Used a 3% down conventional loan
0 Reply
Tim Sipowicz
Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
6y
@Layne T. Where do you invest in Indiana?? I’m from Chicago but looking at Indiana due to lower property taxes.
0 Reply
Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
6y
12 years ago. The condo across from mine.
0 Reply
Tim Sipowicz
Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
6y
@Daniel Guerra do you still invest in Indiana? I was thinking of buying my first investment property out there due to lower property taxes but have heard varying opinions about doing so
0 Reply
Daniel Guerra
Investor · Greater Chicago Area and Northwest Indiana · Member since 2018 · 138 posts · 42 votes
6y
@Tim Sipowicz Yes Tim. I still invest in Northwest Indiana.
0 Reply
Richard Dale-Mesaros
Investor · Campton, NH · Member since 2010 · 285 posts · 143 votes
6y
@Charlie Ann...... two creative strategies with land: Control a parcel with a $10 option and sell it for more to a buyer you find, making the difference (low risk and minimal use of capital for $2,000 to $20,000 or more profit from assigning your option, or doing a double closing), alternatively, find sellers behind on their land taxes and purchase land for say $5,000 with a $7,000 deposit from a buyer willing to pay you $15,000 with owner financing - you now own it having already made a $2000 margin (less closing costs) along with an ongoing monthly cash flow and another check on the back-end when they buy. Food for thought......
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Tim Sipowicz
Rental Property Investor · Lockport, IL · Member since 2019 · 169 posts · 37 votes
6y
@Daniel Guerra what areas are you currently in, if you don’t mind me asking. I’ve only really looked into the Hammond area because I have a friend who invests there, he is also investing in East Chicago. I’m not to familiar yet with the NWI market.
0 Reply
Dan L.
Rental Property Investor · Albany, NY · Member since 2019 · 125 posts · 47 votes
6y
It was a 3/1 SFH in the Albany, NY area for $90k. I probably slightly overpaid (they were asking for $130k originally, so I felt good at the time!). It needed a new roof plus another $6k of work. It still cash flows but I could have done better. Not too bad for deal #1. Learned alot about the process.
1 Reply
Kiera Underwood
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
6y
Mine was a duplex house hack in OKC! It went great because it was such a great deal it wasn't anything near the typical "first home buying experience." I inherited renters, a few plumbing problems and some deferred maintenace. That said it's drastically lowered my living costs and I plan to continue to house hack each year! The one thing I wish I knew would be that regardless of how plumbing is performing you should still scope the mainline. I do still have it!
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