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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Mark Nickoson
Rental Property Investor · Dayton, OH · Member since 2015 · 79 posts · 85 votes
8y
Stephanie,
       My first and second houses were not deals. My wife and I married in 2008 and we couldn't get rid of our houses... had to rent. Each of our parents had rental property and I grew up painting apartments as a kid, so I embraced the idea. We decided to go to a Sherriff's Auction to add to the holdings. We got a house at a good price but it took me way too long (years) to renovate because I did all the work myself.  I'm a Computer Engineer by day and my work involves setting up repeatable systems, so next go around I'll have a better plan.
      Real Estate is kind-of sexy. The HGTV shows make it look interesting and fun. There can be money in it, but it is hard work. If you talk to successful RE people, they have usually spent several years working hard before it all comes together.
      The first thing I would say is be a learner. Listen to every podcast at least twice, maybe even take notes on it. Even if you don't do something exactly the way the guest does it, you are learning from someone who is making successful business decisions. Read some of the books they are suggesting.  Books are cheap training in rehab techniques, funding projects, and reacting to problems that business owners face.
      If you want to turn your RE into a business... there are markets all over that are fairly saturated with flippers and it is hard to keep the business going in their hometown. We all know what happens when there is increased competition. Those that are efficient and competitive will survive, the smaller players can't compete.
      I think the best advice is to find someone who is successful and hook up with them. Ask them what it would take to have them guide you through a deal. Be prepared to give them half of the profits of the first deal. That is ok. It will keep you out of trouble and give you valuable insights to doing business the right way.
All the best,
Mark
2 Reply
Liz S.
Delaware, OH · Member since 2018 · 15 posts · 4 votes
8y
My husband and I bought a SFH straight from the owner for 75K and put 40K into it (ended up doing quite a bit of work ourselves with the help of our dads). We moved in and took out a HELOC a year later at 100% LTV. The property appraised for 235K so we had roughly 120K to move on to other investments. Good luck to you. It's hard work but it's fun!
0 Reply
Abraham Bakongo
Hampton, VA · Member since 2018 · 5 posts · 1 vote
8y
@Aaron Wade What is a turnkey?
1 Reply
John Mang
Member since 2018 · 1 post · 0 votes
8y
Auction $16000
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Bobby Nilsen
Rental Property Investor · Los Gatos, CA · Member since 2017 · 124 posts · 131 votes
8y
@Stephanie Pieri When we started my partner and I spun our tires for about a year. Then he brought us our first deal from another investor he’d been helping and the other investor just didn’t have the time for this low price point. So he gave it to us and we cleaned it up didn’t do any rehab and made a quick $40k. That was his first deal for us and then right after that I got my first deal for us right off the mls. We acted quick, tied it up within the first 30 min it was listed. You can see that deal here. https://www.biggerpockets.com/forums/223/topics/457984-first-multi-family-flip
1 Reply
Henry F.
Homestead, FL · Member since 2015 · 36 posts · 8 votes
8y
@Stephanie Pieri TurnKey from the MLS. I have/had no money so I moved my small retirement account of 30k to a Solo 401k account with checkbook control. I used this money to purchase a property from the MLS (TurnKey). Conventional at a low % down) Decent price, good buy. Not a steal by any means however it did appraise for more than what I purchased it for. Got it rented and cash flowing. Besides that, I’ve pulled out a HELOC from my mother’s house (40k) in order to have funds readily available if another purchase were to present itself. Im always looking. As Im researching and learning I may go a completely different route. I like the BRRR strategy, just haven‘t found the right players to do business with yet. Just getting started and looking for creative ways to build wealth via buy & hold real estate. Good luck, Henry
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John Acheson
Renter · Las Vegas, NV · Member since 2018 · 278 posts · 71 votes
8y
Waited for the bottom and bought from a county.
Sat on pins & needles for several years and
somehow sold it for 10x at the top.
0 Reply
Michael Kiley
Real Estate Agent · Cleveland, OH · Member since 2017 · 184 posts · 253 votes
8y
A friend of mine is an estate attorney and he had a fixer upper he needed to sell. I bought it for 22k and sold it 3 months later for 70k. I had another friend who financed the entire thing. It was a no brainer since the fix up was mostly cosmetic and every house on the street was exactly the same so finding comps was easy.
Buying your first deal is the toughest because there is a mental obstacle to overcome. Once you successfully complete the first one, they all get easier because you have something to compare it to and you can build off the lessons you learned on the first. Do the first one right and you will be an addict forever :)
Best of luck!
1 Reply
Michael Kiley
Real Estate Agent · Cleveland, OH · Member since 2017 · 184 posts · 253 votes
8y
@Abraham Bakongo
"Turnkey" means that you just turn the key and move right in. It's a house that needs no work. After I rehab a house I sell it to an investor looking to buy turnkey. They tend to be a safer investment since there are less things that will need replacement but you will usually pay top dollar to buy one. People who make good money at their day job and don't want the hassle of buying a fixer upper tend to favor turnkey.
Hope that helps!
2 Reply
Josh Belgard
Rental Property Investor · Baton Rouge · Member since 2018 · 20 posts · 19 votes
8y
@Stephanie Pieri Went through a divorce and in despair learned about duplex living. I knew nothing about rentals but common sense told me that having a tenant next door to pay the entire mortgage and most of the escrow wasn’t a bad thing... VERY thankfully, 6 years later I’m now FIRE and able to mentor others. My same tenant is still in the duplex and has never missed a payment and has never been late.
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Erik B.
Rental Property Investor · Amityville, NY · Member since 2018 · 351 posts · 441 votes
8y
@Stephanie Pieri Last 2 years...Countless offers on REOs from MLS and Zillow. Paid attention to what my offer was and what it sold for and even what it sold for flipped. Quickly learned that bidding way under asking in this market was not getting it done. Also observed houses selling flipped for way more than we ever comp'd. Finally got a accepted offer. Closed rehabbed and sold all in 5 months. Was profitable but the education and experience learned along the way is priceless. Started listening to bigger pockets podcast in the middle of the rehab and have been consumed by the amount of information available and the possibilities for the future. Contracts on my second flip are being written as I type. Cant wait to apply everything I learned and experienced from the first deal into this one.
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Ken NyczajPro Member
Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
8y
@Stephanie Pieri Continuous effort of direct mail marketing. As the initial mailers were going out, I started to build my team as well and create LLC’s. Ready, Fire, Aim is the technique I took. Don’t try to perfect everything just take action!
2 Reply
Eric Sullivan
Developer · Salem, MA · Member since 2018 · 83 posts · 68 votes
8y
I had been wanting to get into real estate for a while and had saved up the money. A buddy of mine called me with a duplex opportunity in Nashville. So we decided to buy it. We renovated each unit, and turned one into a long term rental and one into an Airbnb.
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Mark EspyPro Member
Chicago, IL · Member since 2016 · 15 posts · 7 votes
8y
@Stephanie Pieri my wife and I found a property we wanted to look at with our relator. Walked it down and saw there was a lot of potential, and made a modest offer thinking the worst they could do is say no. The owner made a counteroffer and we accepted. Big thing for us was the timing. We saw the house and made an offer over a holiday weekend, and the property had only been on the MLS for 5 days. Working for our first deal over a holiday was absolutely the reason we made our first deal happen.
1 Reply
Blake Luken
Flipper/Rehabber · Cincinnati, OH · Member since 2018 · 8 posts · 2 votes
8y
I started working for an employer that owned 30+ sfh and multi family properties and I immediately expressed an interest in learning more about REI. Fast forward 4 years I had saved enough to buy my first investment property, a live in flip. Walked through the house and as soon as I stepped through the door I knew it was the one. Houses around it are going for 180+ and the neighborhood is continually getting better. I paid 62 for it and I’ll have around 85 all in after rehab. Very excited to let this one go.
0 Reply
Ron Gallagher
Investor · Washington, DC · Member since 2017 · 198 posts · 323 votes
8y
I bought a two bedroom condo after I graduated college which was all I could afford at the time. I rented out the second bedroom to a roommate which covered a lot of my expenses (back when house hacking was called "getting a roommate"). Then a few years later I bought a new house and moved into that with roommates, and rented out the condo behind me. It wasn't glamorous or fast but for me it was the easiest way to get in the game and get started with real estate investing.
0 Reply
Patricia Mangham
Investor · West Palm Beach, FL · Member since 2018 · 64 posts · 15 votes
8y
@Brian Ellis great job about taking a risk and not listening to what other people say. Most of not all successful people are risk takers!
1 Reply
Andrew Witmer
Indian Land, SC · Member since 2018 · 2 posts · 2 votes
8y
I’m closing TODAY on my first deal! I bought a HUD foreclosure to live in. Only cosmetic repairs needed, and earned 30,000 in equity just by walking in the door. With appreciating, I’ll be selling and earning back 40,000+ in equity! If you’re flexible, you can use traditional lending to your advantage like this!
2 Reply
Michael Kistner
Rental Property Investor · Lodi, CA · Member since 2018 · 206 posts · 115 votes
8y
@Stephanie Pieri
I house hacked a triplex using an FHA loan. Put 3.5% down and practically lived for free. Obviously I'm biased now but think it's the best way to get started. Good luck!!
- Mike
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
8y
Originally posted by @Stephanie Pieri:
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!
The MLS. About 85% of all residential & small multi family Real Estate that is sold is sold on the MLS.
1 Reply
Sean Ade
Real Estate Agent · Member since 2018 · 90 posts · 25 votes
8y
@Bill Neves can you tell a little more about this deal? I’m in Portland OR and have been researching real estate investments for a little bit now but have been hesitant to do anything in my area because of how expensive it is here.
0 Reply
Roderick Smith
Investor · Birmingham, AL · Member since 2015 · 74 posts · 25 votes
8y
i was trying to wholesale a property but no buyers were interested in it. So i increased my trade-lines, bought the house used my cards to rehab it and put a renter in it very quickly. I own it free and clear and collecting revenue monthly. My second was a subject- to- the mortgage deal.
0 Reply
Erik Orozco
Mcallen, TX · Member since 2017 · 92 posts · 72 votes
8y
Driving 4 Dollars! Got as many multi plex addresses I could and starting door knocking and calling owners/LLCs!
0 Reply
Bill Neves
Flipper/Rehabber · Vancouver, WA · Member since 2013 · 331 posts · 252 votes
8y
@Sean Ade I look at a LOT of potentials to find one.
A high price area is good. You know people are buying. Just gotta find one low enough to make a profit. That's the game.
It's a sifting and sorting game. Obviously, not every ad or FSBO ends in a deal. Numbers game like most businesses. Gotta throw a lot of offers out there to get one.
If I feel comfortable making an offer, I'm offering too much.
AND... I don't actually 'make an offer', I ask what THEY want and negotiate from there. When I used to make an offer I insulted people and got kicked out a couple times. Haha!
2 Reply
Aaron Krawitz
Houston · Member since 2018 · 28 posts · 16 votes
8y
Originally posted by @Anthony Wick:
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.
Outside your FHA 3.5% loan, for your other two duplex/SFH's how did you finance those purchases? Was it through the money saved on the first duplex or something else? (e.g. HELOC)
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