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).

65Reply
728 views

Most Popular Reply

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!

See this reply in the discussion

166 Replies

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

    @Tina Ricard Accounting for the following:

    Mortgage 

    Taxes 

    Insurance 

    Property Management 

    CapEx

    Vacancy

    Repairs

    Water

    Trash

    Snow Budget 

    Rental License Fees

    About $250 total. I may have over budgeted in some categories, but even so my cash on cash ROI is in the high 13's. Capitalization Rate just a hair under 10.

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

    @Account Closed Nice numbers! Non-owner occupied rates are always about .75-1% greater than those for owner occupants. It's just the cost of doing business unfortunately. 

  • Alexandria, VA · Member since 2016 · 111 posts · 164 votes
    9y

    Congrats! That was awesome!!!

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

    last I check conventional was 4.0%

  • Cedar Hill, TX · Member since 2017 · 10 posts · 4 votes
    9y

    Congrats sir! I wish continued success! 

  • Rochester, NY · Member since 2017 · 8 posts · 1 vote
    9y

    Wow all that included monthly and for $250?? Guess I'm missing something. New here and learning

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

    @Tina Ricard What do you feel that you're missing?

  • Real Estate Broker · IL · Member since 2016 · 284 posts · 178 votes
    9y
    Congrats!! Keep up the good work!
  • Property Manager · Philadelphia, PA · Member since 2015 · 515 posts · 196 votes
    9y

    @Michael Enriquez Congrats! Pretty building btw!

  • Columbus, OH · Member since 2016 · 45 posts · 17 votes
    9y
    Michael Enriquez congrats man very nice job it's gonna be like a snowball effect the first deal is always the hardest to overcome. Keep grinding man only gonna get better from now on!!!
  • Rochester, NY · Member since 2017 · 8 posts · 1 vote
    9y

    @Michael Enriquez That you are saying that your expenses monthly are only $250?  That is not much at all. Unless I am not understanding this .

  • Investor · Hackensack, NJ · Member since 2014 · 17 posts · 3 votes
    9y

    Nice! 

    Congrats Michael on pulling the trigger and giving me the motivation to pull the trigger on my first investment deal any day now. I was close to closing my first deal on a 7 unit multifamily in Pittsburg back in Jan 2016 but the deal fell through at the last minute. I lost some of my momentum and drive but I love reading posts such as yours to keep me motivated... 

    Good Luck and looking forward to seeing when you post you next deal... 

  • Bowie, MD · Member since 2017 · 11 posts · 3 votes
    9y

    @Michael Enriquez Nice property bro.  There are major things going on in Philly.  I was just up there scouting a few properties.

  • Real Estate Professional · Boca Raton, FL · Member since 2016 · 116 posts · 17 votes
    9y

    Congrats! Must be exciting

  • Smithsburg, MD · Member since 2017 · 45 posts · 11 votes
    9y
    Michael Enriquez Congrats! The place looks beautiful. How did you orchestrate the work on the property? Did you do any work yourself or hire out, and if so how did you find/choose the contractor out of state? Also, you sound so well informed!! Can I ask how long you have been studying up before making the leap? What were your educational sources? Do you have a mentor? Sorry for all the questions, I'm just so impressed by how well informed you seem and the confidence in your knowledge and plan going forward is really awesome!! Very inspiring. Again...major congrats on a great first deal!!!
  • King of Prussia, PA · Member since 2017 · 11 posts · 1 vote
    9y
    Congrats Michael! Your post is inspiring! Pradeep
  • Rental Property Investor · Dallas, TX · Member since 2013 · 85 posts · 248 votes
    9y
    Way to go man. That's a beautiful little property based on the pics. One units are my favorite. Rent to young professionals with no kids!!!
  • Daniel CarrollPro Member
    Rental Property Investor · Moreno Valley, CA · Member since 2017 · 14 posts · 3 votes
    9y
    Congrats man! Way to pull the trigger and jump in!
  • Catonsville, MD · Member since 2017 · 2 posts · 0 votes
    9y
    Great job!
  • Investor · Columbus, GA · Member since 2016 · 45 posts · 17 votes
    9y
    Michael Enriquez congratulations! That was a huge step you just took. The place looks great. You said you scoured the MLS for this property, did you search the prices paid for this property in the past? A helpful small tip, is usually your county will have a website for their tax assessor where you can research the last paid price. This becomes powerful when negotiating over price. Your income seems good but do you have an HOA? Are you going to be house hacking? How do you use this property for your future portfolio building? Dude you are going to learn quickly how to start dealing with tenants, definitely read Managing Rental Properties by Brandon Turner and Heather Turner. Good luck!
  • Brooklyn, NY · Member since 2017 · 9 posts · 2 votes
    9y
    Great job Michael. Congrats to you. I am also in process for achieving my first deal. I would love to hear about the team (i.e. closing attorney, any lenders if applicable) you built to assist you in the endeavor.
  • Jonathan RiveraPro Member
    Montclair , NJ · Member since 2016 · 15 posts · 1 vote
    9y

    Congratulations Michael.  You got your head into the game.  Looks like a promising acquisition.  I really like Philadelphia and I have some co-workers that commute to NYC from there!  Enjoy it, hold it and let equity do the rest.

  • Greenville, NC · Member since 2016 · 16 posts · 6 votes
    9y
    Congrats Michael Enriquez !! This gives me motivation to get into my first deal, just have to find the right place!!
  • Union, NJ · Member since 2016 · 49 posts · 29 votes
    9y

    This sounds awesome! Congrats on your first deal! Thanks for the inspiration to just get in the game! 

  • Kevin PaulkPro Member
    Rental Property Investor · Brooklyn, NY · Member since 2016 · 219 posts · 174 votes
    9y

    @Michael Enriquez Any recommendations on a good person or company for a home inspection. I'm looking to close a SFR in Phili at the end of this month.

    Thanks 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.