First sub 30k property

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First sub 30k property

Avi Garg
Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes

Finally closed on my first sub $30k property. This is my first investment since joining BP and 2nd overall. Some quick numbers:

Purchase price $19k

Monthly rent: $715

Cash flow: $330

@Travis Beehler

I was inspired by @Travis Beehler post on his 7th rental in May 2016 and that motivated me to look into sub 30k property in St Louis, MO.  He helped me a lot getting started on this journey and now with one already closed and 2nd closing in 2 weeks, I have started my journey into passive income and hopefully retire in early. I plan to scale it up to 35 doors (or $10k/month in passive income) by end of 2017. 

Lesson learned: Keep track of the paperwork and make sure everyone in the chain gets the updated paperwork. I renegotiated the purchase price to 18k but the lender did not the updated docs and 1 day before closing, this came up. I ended up paying additional $1k as the closing had already been delayed a month and to fix the paperwork it would have been additional week or 2. Some of you might say that I should have fixed the paperwork but I guess I was impatient at that point. 

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Justin B.
Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
10y

I have a couple sub-$30k properties as well.  They are my best cash flowing properties.  At $700 in rent, you're killing it on that one.  Good purchase.  I have several sub-$100k properties that don't cash flow as well as my sub-$30k ones.  There is more risk in sub-$30k properties, but the potential cash flow more than makes us for it.

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  • Tony SanFilippo
    Real Estate Investor · Littleton, CO · Member since 2013 · 197 posts · 77 votes
    10y

    Congrats.  Make sure you have good cash flow and upside equity.  Values could have slow growth after this next election.

    0Reply
  • Gordon CuffePro Member
    Investor · Roseville, CA · Member since 2009 · 1k+ posts · 583 votes
    10y

    @avi 

    @Avi GargI am curious if you have a lender that will do a loan for less than 30k?   if so , can you pm the lenders name on who does such low loan amounts. I hope you have a good property manager. My first property manager in st louis was a crook

    1Reply
  • Lisa Phillips
    Real Estate Investor · Arlington, VA · Member since 2012 · 300 posts · 277 votes
    10y

    Good luck!

    0Reply
  • Minh Doan
    Santa Clara, CA · Member since 2016 · 12 posts · 2 votes
    10y

    congratulations! What is sub?

    0Reply
  • Brent Coombs
    Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
    10y
    Originally posted by @Minh Doan:

    congratulations! What is sub?

     "Sub $30k" just means UNDER $30k. In this case: $19k (but could have been $18k)!...

    0Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    Thanks guys. Looking forward for the next one and then will take a break with sub 30K SF and try Multi-Family

    0Reply
  • Minh Doan
    Santa Clara, CA · Member since 2016 · 12 posts · 2 votes
    10y

    @Avi Garg You are living in San Mateo, CA. how are you managing the property in St Louis, MO ?

    0Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    @Minh Doan I manage through property management company. Its possible to do out of state investing but you need to find a good team to work with

    1Reply
  • Ramon Jenkins
    Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    10y

    Good luck and congrats Avi

    0Reply
  • Mike Carr
    Investor · Newark, DE · Member since 2012 · 81 posts · 45 votes
    10y

    Congrats. What type of financing are you planning on for 35 properties? Cash? portfolio lender? BRRRR method? I have roughly the same goal of 30 properties in the next few years and the hardest part for me is finding the correct financing to make that happen.

    0Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    @Mike Carr A mix of cash, conventional and commercial/portfolio lending. I have a job so I don't have to use the rental money for living expenses and I can use that money to get more properties. In addition to accelerate, I am thinking of selling my primary residence (condo in the SF bay area) and take that equity to buy few more properties. 

    3Reply
  • Antoine V.
    Tucson, AZ · Member since 2016 · 31 posts · 5 votes
    10y

    @Avi Garg congrats on the purchase. How did you find the property? I have been thinking about going outside of my area to find something under 30k.

    1Reply
  • Nik Krohn
    Investor · Woodland Hills, UT · Member since 2016 · 84 posts · 31 votes
    10y

    @Avi Garg Did you have any repairs to do on this property? Is your cashflow number ($330) the number after CapEx, vacancies etc? I assume it is.

    Did you purchase cash?

    Thanks! I am actively looking in Cleveland right now but have considered St Louis

    Is @Travis beehler a realtor for that area?

    0Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    @Nik Krohn No repairs yet but will need to do ~$1k in repair which is mostly tuck job on the outside. The numbers are after CapEx, Vacancies (5% each) and Maintenance (10%). I did not purchase this one with cash. However the next property at ~$23k is cash.

    Travis Beehler is another investor who answered a few of my questions and helped me understand the market a bit better. Somehow I am not able to tag him here. 

    @Maggie Lalor is the realtor I used and she's awesome. She's on BP. I am unable to tag her as well. Funny thing is I tried searching her name here and it doesn't show up in people and had to go into the forums to find her post and then get to her profile.

    0Reply
  • Account Closed
    Orlando, FL · Member since 2015 · 79 posts · 20 votes
    10y
    Congratulations Avi. Thanks for sharing & Inspiring.
    0Reply
  • Tiffany Campbell
    Brooklyn, NY · Member since 2016 · 60 posts · 8 votes
    10y

    Can one really see real returns after financing a sub 30k deal? You have to pay the loan back first! 

    0Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    @Tiffany Campbell Why do you think returns are not there on a sub 30k property? You have to pay back loans in any property you have a mortgage. If you can see returns in 100k property with a loan, then you should be able to see return on a 20k property. I would suggest using the BP rental calculator and run it for a 100k property and a 20k property and you will get your answer.

    2Reply
  • Tom Craig
    Wilmington, DE · Member since 2016 · 2 posts · 1 vote
    10y

    Congrats @Avi Garg!  I am very interested in a similar method of passive income but am currently still in the educate and research phase real estate investing lol.  I look forward to hearing about updates on your current properties and would love to hear how you are making out with your property management as time goes by.  It seems like one of the biggest concern with purchasing out of state is finding a reliable property manager.  Best of luck!

    1Reply
  • Matt Pagano
    Investor · Corona, CA · Member since 2016 · 14 posts · 7 votes
    10y

    @Avi Garg Do you have a lender for sub 30K properties? If anyone can assist in a lender for a sub 30K property please PM me. I will be doing a cash out refi in the next few months on my last property and I am looking for lenders. Thank you

    @Tiffany Campbell I and a few of my friends own nothing but sub 30K properties and the cash flow is very nice. I would recommend reading (if you haven't) @Brandon Turner book "The Book on Rental Property Investing" there is a lot of great information there. 

    2Reply
  • Avi Garg
    OP
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    10y

    @Matt Pagano PM sent

    0Reply
  • Maggie L.
    Property Manager · Saint Louis, MO · Member since 2015 · 186 posts · 76 votes
    10y

    Aww, thanks @Avi Garg I really appreciate that.

    2Reply
  • Account Closed
    Rental Property Investor · Vancouver, WA · Member since 2014 · 308 posts · 144 votes
    10y

    Happy to help Avi!  Glad to see you're making your way!  Also VERY nice of you to mention me.  It's not necessary of course, but it's always nice to hear kudos.  Congratulations!  Hope all works out well  for you! :)

    1Reply
  • Luiz Da Luz
    Long Beach, CA · Member since 2016 · 5 posts · 0 votes
    10y

    @Avi Garg Hey Avi, looking for a lender for sub 30k in St. Louis. Any you would recommend? If you do, could you please PM me? Thanks

    0Reply
  • Walter Minja
    El Cerrito, CA · Member since 2016 · 54 posts · 8 votes
    10y

    @Avi Garg Congratulation and thanks for sharing your first deal ! I am really new into REI and looking to start similar deal. Very interesting to know how do you find a lender for subs Hope you won't mind PM me your contact so that we can chat or meet for a coffee. I live in BayArea too.

    1Reply
  • Account Closed
    NJ · Member since 2016 · 136 posts · 42 votes
    10y

    @Avi Garg

    Congratulations on your success. Really inspiring and motivating ,specially for a newbie REI like me.

    Would like to connect with you to get more inputs and direction from you.

    Thanks,

    Vijay

    0Reply
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