How did you get your first deal?

Kalamazoo, MI · Member since 2017 · 38 posts · 10 votes

Hi everyone! So how did you get into your first real estate deal? I am looking for guidance and inspiration to get my first deal very soon. Tips welcomed!

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

I saved up money and told my father-in-law (a REALTOR) I wanted to buy an investment property. He told me about a home that was on the market in my price range. He used to own it and got a good return from it. I bought it without looking at it, crunching numbers, or anything. It was a complete rookie purchase and I can tell you a dozen mistakes we made.

Long story short, I put $6,700 down and eight years later I sold it for over $70,000 in profit. Then there were the tax benefits, a few vacations paid for from the reserve fund, etc.

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
8y
I saved up money and told my father-in-law (a REALTOR) I wanted to buy an investment property. He told me about a home that was on the market in my price range. He used to own it and got a good return from it. I bought it without looking at it, crunching numbers, or anything. It was a complete rookie purchase and I can tell you a dozen mistakes we made.
Long story short, I put $6,700 down and eight years later I sold it for over $70,000 in profit. Then there were the tax benefits, a few vacations paid for from the reserve fund, etc.
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Stephanie Pieri
OP
Kalamazoo, MI · Member since 2017 · 38 posts · 10 votes
8y
@Nathan G. Very nice thanks for the share! Its always helpful to know people. Thats for sure!
1 Reply
Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Craigslist smoker mobile home in a trailer park for $6700. We exchanged the title (closed) at my bank after I ran a UCC title search. I kept writing checks as my offers, starting at like $5432. After about 5 no's, I was like better hurry up. Running outta checks!
I knew nothing about fixing or repairs and painted the vaulted ceiling 6 times but the yellow kept showing through the following day. Primer? Oh duh. LOL
Sold it on payments with $3k down for $11000. Twice. The lot rent was only $210, so that and my $350 payment kept my buyer's payment below $600. Small dollars but great margins!
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Stephanie Pieri
OP
Kalamazoo, MI · Member since 2017 · 38 posts · 10 votes
8y
@Steve Vaughan Oh wow! Was this in a mobile home park or just a mobile home moved onto a piece of land? I see tons of them for sale but the owners of the parks say I can’t rent a mobile home.
0 Reply
Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
8y
haha @Steve Vaughan "better hurry up, runnin outta checks!"
@Stephanie Pieri I was looking for a fixer upper. Having no experience in RE, For some reason I had it set in my mind I wanted to flip something. I didn't end up flipping anything, I still live there. But after 9 months of looking I finally found a home. Walked into an open house, people were leaving saying "I wouldn't spent 100k on this thing" as it was listed for 280k. Place smelled like mildew, had everything original from when it was built 1974. Wood rot all over, 30 years of being rented out and neglected. The upside, it was in a very desirable location. Got it for 50k less than asking price. Spent the next 9 months renovating it, now have over 100k in equity in that house. That was only a year and a half ago. The people who said I was an idiot, are now saying what a steal it was!
10 Reply
Stephanie Pieri
OP
Kalamazoo, MI · Member since 2017 · 38 posts · 10 votes
8y
@Brian Ellis thats crazy, good for you! How did you get the funds to purchase a house that expensive for your first deal?
0 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
A couple decades ago I went the first time home buyer program at the time. Low money down. Second home was pure savings and put the least amount down I could. Kept both of them for a bit and rented them out when I moved across the country.
When I started over again a year ago (many reasons why), I bought a live in duplex, FHA 3.5% down. Worked plenty of OT and kept every penny. Bought a duplex, SFH, and about to buy another duplex. All within last 12 months.
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Brian Ellis
Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
8y
@Stephanie Pieri I inherited some money from my grandmother who had passed away. I saved up as much as I could (and still do) but it wouldn't have been possible without the help from her. I could have received an FHA loan and moved into a turnkey home like everyone else, but I wanted to make sure I put the money to good use. So that's exactly what I did, every penny went into that house.
5 Reply
Matt P.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
8y
@Stephanie Pieri Small town investing isn't for everyone but I found a place in a small town that had been sitting on the market for over a year. Price dropped all the way from 90k to 39k in that time lol. I got it for 27 cash, put a lipstick rehab on it as it was actually in great shape and refinanced it to pull my money back. It appraised at 75k and I pulled almost 50k out of it. Rented it for 750 and have had the same people in it for a little over 2 years now with small rent increases every year.
17 Reply
Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
8y
A guy whose marriage was going down the toilet offered to sell my wife a rental property with a tenant in place cheaply as long as it was an all-cash deal and it went down before he filed for divorce.
We went over there, looked at the property, and immediately made our offer. All the money came through a 15-year home equity loan we got at an effective rate of 3.125%.
A retarded howler monkey could have made money in real estate in 2011-2012 in this area. It's just a little bit harder now.
4 Reply
Account Closed
Rental Property Investor · Brooklyn NY · Member since 2018 · 263 posts · 469 votes
8y
Outside of my W2 income, I run a small business purely on Instagram. After a few months I noticed my Instagram income was a nice downpayment on a rental property.
I ultimately went the turnkey route for my first property. I'm still learning...
7 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Nathan Gesner:

I saved up money and told my father-in-law (a REALTOR) I wanted to buy an investment property. He told me about a home that was on the market in my price range. He used to own it and got a good return from it. I bought it without looking at it, crunching numbers, or anything. It was a complete rookie purchase and I can tell you a dozen mistakes we made.
Long story short, I put $6,700 down and eight years later I sold it for over $70,000 in profit. Then there were the tax benefits, a few vacations paid for from the reserve fund, etc.
got to love the big dollars in this business via appreciation .. !!! good story.. 10X that one COC
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
8y
Originally posted by @Stephanie Pieri:
@Steve Vaughan Oh wow! Was this in a mobile home park or just a mobile home moved onto a piece of land? I see tons of them for sale but the owners of the parks say I can’t rent a mobile home.
Yep, in a park. Not rented, sold: buy for cash, clean-up and carry on 3-yr terms to owner-occs.
These days you can't do more than 3 per year to avoid Dodd-Frank regs (last I checked). I haven't done one in years, but how I got started early on.
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Mark HartPro Member
Rental Property Investor · Memphis, TN · Member since 2017 · 352 posts · 148 votes
8y
@Stephanie Pieri Welcome to BP!
I'd start with educating yourself on the different types of Real Estate Investing to pinpoint exactly what you want your end goal to be all the while networking at local events searching for someone who has accomplished their goals already / a local mentor.
Then with laser light focus, you will build a team around you to be your "Boots on the Ground"
Good Luck!
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Daniel HymanBusiness Member
CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
8y
@Stephanie Pieri
Great thread!
Our group worked hard to network with realtors and wholesalers who could handle our criteria (2% rule in a low crime area) One particular wholesaler sent us a seller financed deal outside of Pittsburgh. The numbers worked so we pulled the trigger.
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Todd Powell
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
8y
@Stephanie Pieri Started flipping manufactured home in 2001 two weeks before 911! I would not advise this, but had a brother in law running a dealership and their was an opportunity to bid their trades and he would sell. So, cannot really count this one.
But, beside my first primary house in 1992, my first fix and flip was in 2002 and I ran across a auctioneer who was at the courthouse steps literally that same day and he said, "wow, I saw 20 people there to bid on this house on Arthur Circle but it got called off, and you should check that one out." I drove by and noticed it was severely run down, but in a very nice neighborhood in my city. I searched and found the name of the owner, and he happened to work at Hewlett Packard, so I left messages at his home and work. Finally, one random night he called me while we were watching "Survivor" and I ran to the phone as the VM was being left! We made a deal over the phone for $80,000 if we could do paperwork the very next day and I could close fast. He actually showed up at my work as planned, and we made a deal. I vividly can tell you, that my first rehab was just so-so and was all in with costs of $103,000 and sold to a fellow employee for $129,900 with no realtor. I honestly left $10,000 on the table, but it felt good to make $27,000 in 90 days and I caught the bug forever, doing about 30 fix and flips or so, and eventually saved up enough to buy our first buy and hold triplex in 2007. We now have 22 doors, and ownership in a 72 unit building across my OSU's campus in Corvallis, Oregon.
Get your first deal and light a match that will turn into flaming fires!! I love RE
10 Reply
Todd Powell
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
8y
@Stephanie Pieri Oh yeah, that first flip is worth around $350,000 today! My wife had told me to keep and refinance it as rental. Boy, I wished I had listened to her, but I recycled the same money over and over again, using my personal home HELOC. Those were my steps.
5 Reply
Bill Neves
Flipper/Rehabber · Vancouver, WA · Member since 2013 · 331 posts · 252 votes
8y
1999 - First stick built as an investor was a 7 unit and 4 unit apartment building combo, from a tired realtor/investor. No money down. Assumed payments. Repaired and sold 12 months later for $60k combined net.

2013 - First mobile home deal was off a Craigslist ad asking $6500. Got it for $4k, Sold a week later for $9900 and took off with mobile homes.
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @Steve Vaughan:

Originally posted by @Stephanie Pieri:
@Steve Vaughan Oh wow! Was this in a mobile home park or just a mobile home moved onto a piece of land? I see tons of them for sale but the owners of the parks say I can’t rent a mobile home.
Yep, in a park. Not rented, sold: buy for cash, clean-up and carry on 3-yr terms to owner-occs.
These days you can't do more than 3 per year to avoid Dodd-Frank regs (last I checked). I haven't done one in years, but how I got started early on.
I was trying to think back and i think i might have bought a mobile on land as my first rental.. but I did not do very well landlording so i sold it on contract.. and then i bought another one and had the same tenant in there for 15 plus years.. by the time they were done with it I had to bunch it up and put it in a dumpster. in the mean time bought tons of land.. and sold it on contract.. so in a way thats how i landlorded.. still got the cash flow but always through notes..
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2 Reply
Drew Johnson
Cleveland, OH · Member since 2018 · 20 posts · 8 votes
8y
My then girlfriends landlord was complaining about being a landlord so I made him an offer and he took it!
Knowing that we were good people went a long way to getting the deal done quickly and easily.
0 Reply
Nichole Howe
Chicago, IL · Member since 2018 · 3 posts · 5 votes
8y
@Anthony Wick Makes it sound so easy. I have 15,000 so can easily put down 3.5 on a duplex in SWFL as my first deal. Would this be smart?
5 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
@Nichole Howe Hardly easy. I left out small details of going broke in California in 2009 housing market, and then going broke again in the midwest due to a divorce. Hence, started over again...and again. Knocked down, kept getting back up.
If I were to start over again when I was younger, it would be fix and flip 2-4 plexes. Buy, fix up, live in for 2 years (or less), and do again. The BRRRR method from BP all the way. Then I'd probably own apartment complexes by now instead of buying another duplex (which I just put under contract this week).
3 Reply
Matt M.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
8y
@Stephanie Pieri I bought my first house at 24 In 2000 for $45k, 1200sqft single family, fixed it up myself (with no no how), sold it 2.5 years later for $89k. At that point I knew I loved real estate. My novice fix up came out so good my realtor suggested I do that for a living. So a contractor I became over the next 3 years. 15 years later, a few more houses that I lived in/remodeled and made nice profits on, got me a rental paid for in cash and remodeled with no debt. $800/month posItIve cash flow for single family with garage. Can not wait to buy another... and another.... good luck to you!!
1 Reply
Joseph Back
Rental Property Investor · Montgomery, AL · Member since 2017 · 277 posts · 221 votes
8y
Young and somewhat broke, I convinced my father to open a Home Equity Line of Credit on his personal residence to pursue the BRRR method. Plan was for him to put up money and I would find and carry out all transactions as well as manage properties for a 50/50 split of all profits. Found a tired landlord who was selling all 40 properties he owned. Purchased a 4 bed 1 bath cape cod with an existing tenant that was renting at $850 for $69,000. Turned around and started process to get mortgage on property the day after closing. Appraisal came in at $100,000 and given one local bank in my town will lend at 85/15 LTV, I could have pulled out all of my original capital plus some, however, to be conservative chose to just pull out initial investment of $70k so that HELOC could be replenished for next purchase. In the meantime also got existing tenant to sign a new annual lease at $1,000 a month. Recently purchased another property which I found from a motivated seller on Craigslist and am in middle of renovation on that one.
1 Reply
Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
8y
@Stephanie Pieri through a Realtor and it was a househack Duplex! I think the best way to start is through househacking and it works for anyone. Low down payment Lots of education Easy way to save money Loan paydown Tax benefits Easy way to start building a rental portfolio!
[email protected]512-888-9122
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