Just Closed My First Deal!

Just Closed My First Deal!

Rental Property Investor · Mount Vernon, NY · Member since 2016 · 89 posts · 125 votes

BP family! I'm very excited! I just closed my first deal as an investor a week ago. After scouting the MLS for months I finally pulled the trigger on a duplex (1 bedroom over 1 bedroom) in West Philadelphia. It's not the deal of the century, but here are the numbers:

List Price: $69,900

Purchase Price: $60,000 + $500 seller concession (net purchase price: $59,500)

Appraised Value: $67,000

Downpayment: $15,000

Projected Gross Rent: $1,250/mo

As mentioned before I didn't hit a homerun but the numbers work. I managed to have the seller make a good number of repairs and turn over the units (since both were vacant). The property already had a new roof, updated electric and plumbing installed throughout so all that's really needed now are cosmetic updates. Here are some pictures:

I'm in the process of getting the floors in the second unit refinished and heeded the advice extended in many of the posts that predate this one "get multiple contractor bids!" I was surprised at how wide the spread in the bids would be.

What Will I Do Different Next Time:

My goal is to acquire 100 units over the next 10 years. I've come to the conclusion that in order to do so I can't go about purchasing property as a retail buyer, tying up all of this cash. With this property I was just so eager to actually do something, rather than sit on the sidelines and analyzie deals for God knows how long. I've told myself that my next purchase will be a value add project where I can get my capital back after a cash-out refinance and use the money towards the next acquisition (good 'ol BRRR strategy).

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John G.Pro Member
Rental Property Investor · Brainerd, MN · Member since 2015 · 72 posts · 42 votes
9y

congrats!

Be careful it is very addicting.  I started with a duplex flip....changed my mind and rented it.  That was 5 years ago now I'm up to 17 rentals.  I hoping for 5-6 more this years.  I love you have ambitious goals, that's what it takes.  Good luck my friend...you will succeed if you believe!

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  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    9y

    good start, now for the next steps!

  • Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes
    9y

    @Michael Enriquez congrats! Welcome to the show! The hardest part as you know is always pulling that proverbial trigger. Great looking units!!! Best of luck to you!

  • Clifton Park, NY · Member since 2016 · 2 posts · 1 vote
    9y
    Fantastic! Looks like a solid first deal!
  • Oklahoma City, OK · Member since 2016 · 32 posts · 10 votes
    9y

    Congrats! You are heading in the "right" direction. Taking action is better than not taking action. If you want to keep buying properties then you must take the approach of "adding value" to the property. Buy a "fixer-upper" and then rehab it and refinance. I would put together all your financials in a folder and visit a couple of local credit unions and local banks. Give them your "plan of action" and then you will understand what they are expecting from you, in order to refinance your future properties. Once you have a local bank refinancing your property purchases then you can "scale" it up and make many purchases. Good luck to you and have a great 2017!

  • Rental Property Investor · Union, NJ · Member since 2014 · 16 posts · 6 votes
    9y

    @Michael Enriquez congrats, like you I just jumped in as well. I purchased my first out of state REI property in Ohio. Its now on the market (8 days) and will be real happy once its rented. Do you have "boots on the ground" so to speak in the Philly market? I used a reall good guy in the Ohio market and find that as a very important part of out of state REI. I counts have done it with out the help unless I had the time to sacrifice. Just curious, because I am interested in other states but find that having someone to trust in each of those areas is a challenge. Best of Luck to you! Once this one is rented I will be onto the next :)

  • Investor · Gordonsville, VA · Member since 2015 · 3 posts · 2 votes
    9y

    Congrats on your first deal...and I'm sure there are many more to come...like your goal-oriented attitude...it is encouraging to newbies like me!

  • Rental Property Investor · Mount Vernon, NY · Member since 2016 · 89 posts · 125 votes
    9y

    Thank you all!

    Here are some pics of how the floor refinishing came out. What a difference!!

  • Rental Property Investor · Mount Vernon, NY · Member since 2016 · 89 posts · 125 votes
    9y

    @Rob Hayes I do! It's very important to have a trusted individual down there with access and can give you their input on what work may cost.  We're in an expensive market and it doesn't compare to PA and OH, so it's imperative to have third party input on the numbers someone throws at you for work, mostly due in part to the fact that what seems cheap to us may be out of the norm in that area.

  • Rental Property Investor · Boston, MA · Member since 2017 · 72 posts · 35 votes
    9y

    Great job! Congrats and thanks so much for sharing! Love to see BP family winning!

  • Real Estate Agent · Rochester, MN · Member since 2017 · 49 posts · 23 votes
    9y

    Congratulations on taking the first step!  It looks like a nice property and if it's going to cash flow for you, that makes it a winner!

  • Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Michael Enriquez Congrats man!!  One at a time, keep grinding!!

  • Investor · Bedford, NY · Member since 2015 · 33 posts · 13 votes
    9y

    Annual gross rent of 15k, assuming your operating expenses are half, financed 80% at a 5% interest rate, which comes out to around an 8 cap.  Not bad at all - you are in the game!

  • Realtor · Corona, CA · Member since 2015 · 28 posts · 9 votes
    9y

    Congrats @Michael Enriquez! Cheers to many more deals to come =)

  • Philadelphia, PA · Member since 2012 · 104 posts · 8 votes
    9y

    Many congratulation...you're over a tough hurdle!  Philly is a very competitive and in my humble opinion, a tad overpriced given the quality of a lot of neighborhoods, though we keep plugging away. 

    Keep it up!

  • Woodridge, IL · Member since 2017 · 18 posts · 6 votes
    9y

    Hi. I am thinking that your new job does not have enough heat. I am only seeing one outlet. There are none above the kitchen counters.

    Home Inspector 

  • Philadelphia, PA · Member since 2016 · 11 posts · 4 votes
    9y

    was this listed on the MLS? I dont remember seeing it.

  • Baltimore, MD · Member since 2016 · 1 post · 1 vote
    9y

    Congrats!  You will be my motivation to get my first property too!  Pulling the trigger is a little scary but exciting.  Looking forward to hearing about your next deal1

  • Minot, ND · Member since 2017 · 15 posts · 6 votes
    9y

    Congrats! Now I'm getting motivated to follow you and close my first deal

  • Investor · Vancouver, WA · Member since 2017 · 30 posts · 6 votes
    9y

    @Michael Enriquez Thanks for sharing your experience and congratulations on your first property! I've bought a sold a few properties over the years, but, like you, I'm now in this game with a different mindset and game plan.

    I would love to hear more about your strategy if you wouldn't mind helping someone in similar shoes as yours. I'll shoot you a PM.

  • Jeremy HartPro Member
    Residential Real Estate Broker · Blacksburg, VA · Member since 2016 · 155 posts · 67 votes
    9y

    Nice job, Michael!

  • Investor · Mableton, GA · Member since 2017 · 29 posts · 13 votes
    9y

    Congrats!!! Can't wait to follow in your footsteps! 

  • Real Estate Investor · Honolulu, HI · Member since 2016 · 73 posts · 47 votes
    9y

    congrats but i have one question, you say you are aiming for 100 units in 10 years, for one thats 10 units a year or nearly 1 unit a month, thats a lot of deals to grab in your local area. Hopefully the market can fullfil that request.

    As for the question. How are you going to manage all 100 properties? Even if you have 10 property managers managing 10 properties whos managing the 10 property managers? Also whats your plan on getting the capital to be able to do nearly 1 deal a month?

    Sorry, the 1 question turned into 3 :p but i would like to hear how you plan on accomplishing all thoes questions.

  • Tallahassee, FL · Member since 2017 · 1 post · 0 votes
    9y

    I'm very new.  can someone please explain:  "I've told myself that my next purchase will be a value add project where I can get my capital back after a cash-out refinance and use the money towards the next acquisition (good 'ol BRRR strategy)."

  • Kansas City, MO · Member since 2016 · 8 posts · 5 votes
    9y

    Congratulations! 

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    9y

    Congrats Michael! That's certainly a great rent-to-cost.

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