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

    @Jocelyn Borg It was negotiated in the contract to have the seller turn over the units. He painted and cleaned them out. As far as finding the flooring contractor, I pulled up about 20 phone numbers on google, scheduled about 10 to come and give me a bid (6 showed up), from there I sort have felt them out. I didn't choose the cheapest guy, but overall I was happy with the results. 

    In regards to education, I just had a burning desire to learn the ins and outs of real estate in general. It started before I purchased my primary residence in 2015. I managed to really take it to another level when I discovered BP; late spring 2016. The podcasts and book recommendations within the podcasts are really great. I've never read so much until I contemplated investing and now I can't put these books down. 

    @Kevin Paulk I used ValueGuard down in Philly. It was a great experience, Dave was very thorough with his explaination of everything, I learned a lot and it'll certainly help me vet properties in the future. 

    @Newton Mignott When I first took a trip down to Philly I scheduled about 7 showings with each respective listing agent to vet them out. I chose my agent based on the fact that he didn't appear bothered to show up at a showing for a $40k house and that he is an investor as well. My lender I chose actually has a loan officer active on these forums and I thought it would be best to build a relationship with a local bank so that by the time I need to seek a portfolio product they know me and my finances. As far as an attorney, I didn't retain one. Pennsylvania is a title close state so everything goes through a title company. 

  • Smithsburg, MD · Member since 2017 · 45 posts · 11 votes
    9y
    Michael Enriquez Thank you for the thorough response! Sounds like I'm on the right track then, good to hear you had about a year of soaking up info. Thanks again!!
  • Ozzy SirimsiBusiness Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes
    9y

    Congrats, it looks great, keep it going :D))

  • Philadelphia, PA · Member since 2016 · 101 posts · 35 votes
    9y

    Congrats and keep the momentum going!! 

  • Cincinnati, OH · Member since 2017 · 22 posts · 8 votes
    9y

    Congrats, my first deal was also a duplex, next week I close on my second deal. A SFR....this stuff gets addicting.

  • Investor · Richmond, VA · Member since 2017 · 32 posts · 12 votes
    9y
    Big cong! Solid first step!
  • Investor · Bonita Springs, FL · Member since 2015 · 54 posts · 12 votes
    9y
    Congrats! Keep it up.
  • Real Estate Investor · Gilbert, AZ · Member since 2016 · 42 posts · 9 votes
    9y

    Congratulations ! no action no biscuit !

  • Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes
    9y

    @Michael Enriquez

    Congrats Michael!  Don't downplay what you have done; it's great!  I too am from New York but decided to invest out of state because the numbers just didn't add up for me here.  If you ever want to switch gears from New York due to the cash flow issues, definitely PM me.  In the mean time enjoy your deal!

  • Rental Property Investor · Claremore, OK · Member since 2017 · 4 posts · 2 votes
    9y

    Looks like a decent cash flow building...Now..Thats half the battle done with. Next, learn how to find quality tenants..Leave it empty till you find a good prospect. Do good backgrounds and hold your ground when it comes to standards. Credit, landlord history, criminal history and employment are critical. Dont cut corners and you will find you arent chasing rent and having to evict. It will pay off big time in the long run. Take a peek in their cars during your meeting...That is how they will keep your rentals. Trust me. Like me, you are so far a relatively small time investor that has great plans for the future. Dont sour yourself by rushing to sign a lease....oh and yeah, get a GOOD lease that protects you and the tenant.  Good luck to you.  

  • Investor · Dripping Springs, TX · Member since 2017 · 17 posts · 4 votes
    9y

    Awesome!  Congrats

  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    Nice work.  Keep it up.

  • New York City, NY · Member since 2017 · 9 posts · 0 votes
    9y

    What's the vacancy you see in the area? Also, if you bought a multi family unit, do you think you could've refinance out after leasing it up to continue this snowball effect? How did you manage to find such a cheap product? Based on search, everything was in the 200s at least for multi-family.  

  • Real Estate Agent · Jamaica, NY · Member since 2016 · 32 posts · 10 votes
    9y
    Congratulations
  • Real Estate Broker · Reston, VA · Member since 2014 · 1 post · 0 votes
    9y
  • Uniondale, NY · Member since 2015 · 2 posts · 0 votes
    9y

    nice, congrats! i live in ny also and am looking at other options out of state. sending you a pm now

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