Brandon's 100 day challenge??? I did it in 81........

Real Estate Deal Analysis & Advice

Brandon's 100 day challenge??? I did it in 81........

Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes

March of this year I had a conversation with my Uncle that consisted of terms like "1030 exchange" and "gross rent" and other terms I had no clue what they meant. He sent me a few podcasts from this website I had never heard of...Bigger Pockets??? I listened. Then I listened some more. Then the bug bit me and I couldn't itch fast enough. I watched @Brandon Turner's webinar on April 6 and he challenged the viewers to buy their 1st/next property within the next 100 days. I closed on my duplex on day 81.

Here are the numbers......

Purchase price $300 k

Conventional mortgage 10% down with no PMI

vacancy 3% (vacancy is almost non-existent in this BYU town) $69

repairs 5% (I bought it fully remodeled) $115

cap ex 8% $184

other expenses $50 (internet I provide for my tenants)

gross monthly income $2300 ($1400 upstairs for a 3/1 and $900 down for a 2/1)

cash flow $274.39

cash on cash ROI 8.23%

The thing I did not add in is PM, because I will manage it myself. But, from here on out every deal I analyze will have 9% PM included.

"Some people want it to happen. Some wish it would happen. Others make it happen." Michael Jordan

Coco

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Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes

9y

Let me give you an example: In 2009, I bought a duplex in San Mateo, ca for 425k. 1600 sf or so. Similar to what you bought, but in much worse condition. Total rent is $3300 for both units, after some simple remodel. 20% down, about $340 k loan. 30 year fixed. Monthly mortgage, property tax, insurance about 2400. Monthly cash flow about -900. I was a newbie and did not even know what capex was. The house is very old, built in 1919. Foundation is settled. Windows are bad. Paint are peeling. We spent about 15 k to do some basic repairs. At that time, I did not know much about REI nor construction. A lot of the work was done poorly by contractors. However, now, the rent is $6500. Property values at 1.2 -1.3m. Now, I learned so much from my own mistakes. The key is location. Minor mistakes as a newbie can be overcome later with experience. The only two most important thing: 1: timing 2: location The house is of no concern to me now. Whether it is good or bad, I do not care. Because all those deficiencies are easy to fix. The only thing that can not be fixed is timing and location. If there is a fire that burns it down, I can rebuild a brand new for $300 k, and the new house would be worth around 2 m. From the picture of your duplex, it is in a nice neighborhood. That is what counts.

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Roger S.
Investor · TX · Member since 2015 · 393 posts · 290 votes
9y
SWEET!!
0 Reply
Adam Meadows
Investor · Atlanta, GA · Member since 2017 · 70 posts · 25 votes
9y
Congrats @Coco Zuniga! Very inspiring story :)
0 Reply
Coco Zuniga
OP
Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes
9y
@Roger S.
@Adam Meadows
thank you!!!
ps forgot to mention that my mortgage with taxes and insurance is $1607!
0 Reply
Kealoha Lee
Flipper · Juneau , AK · Member since 2017 · 18 posts · 6 votes
9y
The ? is would have Brandon bought yourDeaL? snow removal costs, landscaping, lots of expenses you left out.
Please tell us you see Big Appreciation coming to your neighborhood .
0 Reply
Dustin Verley
Wholesaler · Newark, DE · Member since 2015 · 303 posts · 80 votes
9y
Congratulations, great looking acquisition and even better numbers.
0 Reply
Fernando E.
Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes
9y
@Coco Zuniga nice numbers and love the house! ConGrats!
0 Reply
Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
9y
Coco Zuniga What kind of financing did you use to buy the property with 10% down and no PMI? VA loan? Are you doing a house hack?
Podcast Guest on Show #21
0 Reply
Michael Cohen
Investor · Towson, MD · Member since 2014 · 472 posts · 257 votes
9y
That is awesome; way to go!!
0 Reply
Coco Zuniga
OP
Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes
9y
@Kealoha Lee don't think Brandon would have bought it cause it's not in Podunk. In my lease I state that the upstairs unit is responsible for maintaining the lawn and their own snow removal (including the driveway because they have access to it). The downstairs is also responsible for their snow removal on porch/stairs (they have street parking). I did not buy whatsoever for appreciation. If I get it, icing on the cake :)
@Anthony Gayden There's a local CU here in Salt Lake that offers a conventional loan. A lot of investors here take advantage of it! You can only have 2 of those loans in your name though. (But my husband can also have 2 in his name wink wink). The interest rate is a little bit higher (5.125), but I was willing to take that due to the lower amount of money down. No house hack. I have 2 kids, 7 and 9, and we need more space than what the duplex provides.
Thank you all for your kind words!
0 Reply
David Song
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
9y
Coco Zuniga Great job. You picked the right house. The number looks very good. Some people will tell you to buy cheaper houses. They will tell you that your number is not good as theirs. That is just wrong. Every market has its own numbers. Your cash flow covers all expenses well. Wait for appreciation, you will win big. Utah is is a great place.
0 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
9y
Nice looking house! Excellent job taking action, which is what 90% of people fail to do.
Podcast Guest on Show #243
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0 Reply
Craig J Chelette
Salt Lake City, UT · Member since 2017 · 28 posts · 9 votes
9y
@Coco Zuniga Is it mountain america CU that does the 10% down no pmi?
0 Reply
Coco Zuniga
OP
Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes
9y
@Craig J Chelette yes!
0 Reply
Coco Zuniga
OP
Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes
9y
@David Song thank you!!
@JD Martin anyone can do it, not everyone will. will you? I read that phrase many times as I picked up Millionaire RE Investor by Gary K. I answered the last question to myself many times...YES!!!
0 Reply
Rick Pinney
Melrose Park, IL · Member since 2017 · 49 posts · 15 votes
9y
Coco Zuniga what year is the house? Did you have an inspector? I would still budget higher for cap ex just because it may be remodeled, did you get an idea of the life expectancy on the big ticket items? Ac, furnace, plumbing, roof? Congrats!!! Welcome and it is addicting!!
0 Reply
Coco Zuniga
OP
Investor · Herriman, UT · Member since 2017 · 79 posts · 60 votes
9y
@Rick Pinney 1925. I know that the plumbing has been redone (not positive of the extent of it), the roof is brand new, just replaced in April! yes, I had an inspector. When I got the report I was super overwhelmed lol -- I wasn't sure what to expect because it was my first one with a house that old... but I had the seller fix a few things, my electrician did a few things, the plumber fixed a few leaks, the house has a swamp cooler that I had to have looked at, and my dad and I did the rest!
2 Reply
David Song
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
9y
Coco Zuniga Your capex is fine. $180/ month is sufficient for this type of house. The house was not that big. Over years, if rent increases based on inflation rate, that will easily cover the capex.
0 Reply
David Song
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
9y
Let me give you an example: In 2009, I bought a duplex in San Mateo, ca for 425k. 1600 sf or so. Similar to what you bought, but in much worse condition. Total rent is $3300 for both units, after some simple remodel. 20% down, about $340 k loan. 30 year fixed. Monthly mortgage, property tax, insurance about 2400. Monthly cash flow about -900. I was a newbie and did not even know what capex was. The house is very old, built in 1919. Foundation is settled. Windows are bad. Paint are peeling. We spent about 15 k to do some basic repairs. At that time, I did not know much about REI nor construction. A lot of the work was done poorly by contractors. However, now, the rent is $6500. Property values at 1.2 -1.3m. Now, I learned so much from my own mistakes. The key is location. Minor mistakes as a newbie can be overcome later with experience. The only two most important thing: 1: timing 2: location The house is of no concern to me now. Whether it is good or bad, I do not care. Because all those deficiencies are easy to fix. The only thing that can not be fixed is timing and location. If there is a fire that burns it down, I can rebuild a brand new for $300 k, and the new house would be worth around 2 m. From the picture of your duplex, it is in a nice neighborhood. That is what counts.
2 Reply
David Lichtenstadter
Rental Property Investor · Northern NJ · Member since 2016 · 341 posts · 144 votes
9y
Coco Zuniga wow great job!!! Would you please tell us how you got the deal ? Also why are you providing internet for a our tenants? Thanks,
0 Reply
Jenifer Kynor
Fort Collins, CO · Member since 2017 · 273 posts · 91 votes
9y
Everything looks great and the house is amazing!
Awesome story! Congratulations.
0 Reply
Justin Young
Investor · Honolulu, HI · Member since 2016 · 362 posts · 93 votes
9y
Congrats on the first. Good luck on acquiring more and more to build your portfolio. You've got 19 days to get under contract for the second property.
0 Reply
Aaron Hanley
Investor · Yarmouth, Nova Scotia · Member since 2017 · 4 posts · 2 votes
9y
Amazing, congrats! Nice looking place too!
0 Reply
Erica M Chambers
Philadelphia, PA · Member since 2017 · 26 posts · 11 votes
9y
That's wonderful! Congrats @Coco Zuniga
0 Reply
Heather O.
Specialist · White Rock, British Columbia · Member since 2017 · 99 posts · 34 votes
9y
Impressive! Really attractive pics!
0 Reply
Anthony GaydenPro Member
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
9y
Originally posted by @David Song:

Let me give you an example:
In 2009, I bought a duplex in San Mateo, ca for 425k. 1600 sf or so. Similar to what you bought, but in much worse condition.
Total rent is $3300 for both units, after some simple remodel. 20% down, about $340 k loan. 30 year fixed. Monthly mortgage, property tax, insurance about 2400. Monthly cash flow about -900.
I was a newbie and did not even know what capex was.
The house is very old, built in 1919.
Foundation is settled. Windows are bad. Paint are peeling.
We spent about 15 k to do some basic repairs. At that time, I did not know much about REI nor construction. A lot of the work was done poorly by contractors.
However, now, the rent is $6500. Property values at 1.2 -1.3m.
Now, I learned so much from my own mistakes.
The key is location. Minor mistakes as a newbie can be overcome later with experience.
The only two most important thing:
1: timing
2: location
The house is of no concern to me now. Whether it is good or bad, I do not care. Because all those deficiencies are easy to fix. The only thing that can not be fixed is timing and location.
If there is a fire that burns it down, I can rebuild a brand new for $300 k, and the new house would be worth around 2 m.
From the picture of your duplex, it is in a nice neighborhood. That is what counts.
Your post is very interesting. You say the property is valued at 1.2-1.3 million. Later in your post you say that if it burned down and you had to rebuild it, it would be worth 2 million and you would only have to spend $300K.
Why don't you do it? Tear that place down, build a brand new property in its place, and cash out with over a $500,000 profit.
Podcast Guest on Show #21
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