My first deal diary and my introduction.
Hello Biggerpocket peeps,
Just want to introduce myself, I signed up with BP for a several years back, but have been so busy with business to get on this board and contribute. So my name is Guy Nguyen, Real Estate Broker here in Seattle Area. Starting investing in 2013 and recently go into Real Estate Profession full time to further pursuit my investing dreams.
Here's my 1st deal story
In 2012, the real estate market starting to make an upswing, but most institution investors still waiting on the side before they jump in. So I knew this is perfect time for me to buy a home, specifically an investment home. Most of my people I know are looking to buy that big house, that they can barely afford. I knew from reading books and educated myself that if you buy a big home, you will sit in that home for a long time and if you are an investor you are not leveraging. So how can i buy a my first home, as a rental home with little money in my pocket and at time make dirt?
At the time I was studying to get my nursing license/board, operate a small business and had a night full time job that making $35k/year. With $35k/year and one would be thinking are you nuts you can't get a loan for even a home and rental home would be pipeline dreams. Despite all the nay sayers, I started to do my search for my first rental home, my price range under 150k below and has to have 2 separate living units in a Seattle Area and my will be paying $0 for mortgage and with no money to down. So how can I managed to do this? No money to down, will not be paying $0 for mortgage on a $35k income?
Here's HOW..
My two biggest obstacles that I found where financing and find the right real estate agent to look for what I need. For the financing part, remember money market was tight, and they are more strict, that's what I found out early on. I can't use my business income because it's not verifiable and not 2 years on tax return. They needed 2 year employment and 3.5% down for owner occupied. So I was denied a few times from lenders to get me pre-approved, so I shopped around and found a lender that was able to write for me and at the same time I was able to locate the exact home I was looking for after several looks. I also use a few agents, as they are sometime can be a little less helpful if you are only buying home at a low price, I assume it's the commission check for the work I suppose. It shouldn't be that way, but some are, so find the right agent that will work ( I know first hand) with you as an investor is crucial, (this is also another reason why it prompted me to get myself a real estate license to at least do my own deal)
So to sum this up, took me close to 6 months to find a home in 2013, it was a home (3+ br, 2 bath; that has lower level unit with separate entry with kitchen asking for $155k, make an offer and was accepted at $150k with 4k closing cost and as for 3.5 % down payment it was a gifted money from a relative. (which I later gifted back in a monthly basis) I was able able to secure a renter in place before I even closed the deal, so renter signed and moved in the day i got my key and renter pays first, last and deposit before my first money of mortgage was due. So mortgage was $930/month, rented the complete lower unit for $640 with split utility. I plan on rented the extra room to a student for $300/month, so that will cover my base for $0 mortgage payment. But I found a gf at that time, who is now my wife. So no roommate as my plan. Plan changes for the better i guess, so we ended up paying $290 mortgage plus 1/2 utilities.
So as you all know prices are making huge surge, there's no way you can buy this home for that price 2 years later, zillow estimate at 243k right now. At the current I rented out for total of $1,500 and cash flow.
So I glad i took the plunged and hope to be of value to some readers on here.
But let me know if anyone need anything, will glad to be a good resource and networking and I apologize before hand if i mistyped/misspelled or grammar error, i m a horrible writer, this is first type and post..lol.
Cheers
Uy "Guy" Nguyen