First Deal Success Story!

First Deal Success Story!

Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes

Hey BP, Im super excited to share with you my first deal! I'll include as may before and after pictures and I can.My brother and I partnered on the deal and got a standard loan with 20% down. This is a long distance rental.

Our first property was a 2 bed 1 bath in southern Oregon. We bought a home "on the other side of the tracks" that most people wont touch, but in talks with the city the area is having a lot of money put into it. Both my brother and I are electricians and have worked in construction a long time so we didn't have any issues with the rehab. When we purchased the property it could haven been rented out "as is", but we are doing the BRRRR strategy and want to refi now that it's complete and buy a few more in the same neighborhood.

I'm a little late on posting this because of the weather, we first were going to paint in July but its was 105F that day. We did all internal rehabs after purchase in July of 2017, but recently finished up paint a few weeks ago.

Numbers:

Cost: 

Asking 115,000 

Purchase Price 110,00

ARV 135,000-145,000

Closing Costs 3,600

Rehab costs > 7,000 ( we did most of the work ourselves)

Mortgage 605

Expenses >400

Rent 1,200

Rehab included:

Painting interior- home interior was originally 7 different colors. Not its only 2.

Bathroom- New toilet and Shower has been painted.

Floors- Hardwood refinished, and kitchen lamnit replaced.

Kitchen/Washroom- All cabinets replaced and handles painted. Wall paper removed, refrigerator installed and washroom sink installed/plumbed.

Front yard- Fence installed, walkway laid out and grass redone.

Backyard- Walkway installed, RV parking now has gravel, sprinkler system installed.

Doors- New doors put on front, rear, and garage entrances. Garage also got a new roll up door.

Exterior- Painted and not UGLY 1950's blue anymore.

The southern Oregon market is wonderful, we had this place rented before we were done rehabbing and the tenants offered to double to deposit if they could move in early. We have been fortunate to have a good property manager as well. We have another 3 properties we are looking at but need to work out the funds. If anyone has questions I'd love to answer. This is my first property so I may have left out some information.

I have a lot more photos of the interior but the keep turning sideways when I post them. If anyone knows how to fix that, ill upload more photos.

-Vince Townsend

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Most Popular Reply

Rental Property Investor 路 Everywhere, USA 路 Member since 2012 路 689 posts 路 525 votes
8y

@Vincent Townsend congrats on your first deal! 

See this reply in the discussion

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  • WorldWide 路 Member since 2016 路 1k+ posts 路 1k+ votes
    8y

    Don't want to be that guy, but I work with numbers every day. With the numbers you've provided, you're out roughly $33k (dp+reno+closing). Even with your max ARV of $145k, depending on LTV (most likely 75%, right?), you're either $12k+new closing fees (@75%) in or $5k+new closing in the house (@80%). Of course, these numbers increase if your ARV comes down.

    With the cash flow. At $145k, you're at roughly $600 for PI. I don't know what the insurance and taxes run there, but when you add your reserves (20% of rent for capex+vac+repairs), you'll probably cashflow around $150/mo, maybe a bit more, if TI is less than $200. Which still should translate to double digit coc, again, depending on the ARV. I wouldn't classify this as a true BRRRR deal, but a decent cash flowing one for sure, so congrats!

  • Indianapolis, IN 路 Member since 2018 路 4 posts 路 3 votes
    8y
    Congratulations and thanks for sharing! Your enthusiasm really shows. Getting it just right the first time rarely happens but completing that first buy & fix has to be a tremendous boost of motivation for you. I鈥檒l be doing my first deal soon!
  • Flipper/Rehabber 路 San Marcos, TX 路 Member since 2016 路 128 posts 路 38 votes
    8y

    That's awesome. Congrats man! I recently just got my first deal so I know the high you are feeling! Best of luck! 

  • Buhl, ID 路 Member since 2016 路 6 posts 路 3 votes
    8y

    same i was going to ask how he painted the toilet lol

  • Buhl, ID 路 Member since 2016 路 6 posts 路 3 votes
    8y

    Gratz on your first deal

  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor 路 Kansas City, MO 路 Member since 2014 路 10k+ posts 路 5k+ votes
    8y

    Congrats Vincent, very well done!

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y
    Originally posted by @Tim Eng:

    Congrats @Vincent Townsend! Your story is inspiring! My wife and I are searching out of state for a good first deal ourselves. I鈥檓 attending Rod Khlief鈥檚 Bootcamp next weekend in LA to learn more. Looks like we are neighbors, let鈥檚 grab coffee sometime! 

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y

    Hey Tim, Have you done any deals? How come you're attending a bootcamp? And yes Ill message you about coffee!

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y
    Originally posted by @Ida Powers:

    @Vincent Townsend Excited to hear how your refi goes!!! Were looking to find our first deal now too but its very intimidating! 

     Hey Ida! 

    It doesn't have to be intimidating. If you do you're numbers and use the BP calculators you'll be fine. There is even a section here on BP where you can post a deal you have and ask for help. Also I look at deals almost like public speaking. Yes its scary, but if you have practiced your speech again and again you don't have much to fear "that you can control". Remember, If you fail to plan, you plan to fail. Just keep running deals until you're not nervous.

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y
    Originally posted by @Jessica G.:

    Congrats!! Send me your deal vibes.

     Vibes have been sent! :)

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y
    Originally posted by @Victor S.:

    Don't want to be that guy, but I work with numbers every day. With the numbers you've provided, you're out roughly $33k (dp+reno+closing). Even with your max ARV of $145k, depending on LTV (most likely 75%, right?), you're either $12k+new closing fees (@75%) in or $5k+new closing in the house (@80%). Of course, these numbers increase if your ARV comes down.

    With the cash flow. At $145k, you're at roughly $600 for PI. I don't know what the insurance and taxes run there, but when you add your reserves (20% of rent for capex+vac+repairs), you'll probably cashflow around $150/mo, maybe a bit more, if TI is less than $200. Which still should translate to double digit coc, again, depending on the ARV. I wouldn't classify this as a true BRRRR deal, but a decent cash flowing one for sure, so congrats!

    Hey Victor,

    Yes 33k sounds about right. I spoke to a lender today. New numbers would be $4600 close $790 mortgage with tax and insurance and we should be able to pull out at least the 33k. I look at it as getting a free house when all is done and being able to still reinvest. We should be cash flowing after cap x a little over $200. We also may raise rents. 

  • Kuna, ID 路 Member since 2016 路 40 posts 路 29 votes
    8y
    Originally posted by @Kelly Durrant:

    same i was going to ask how he painted the toilet lol

     We replaced the toilet but painted the bathtub. Can you paint a toilet lol?

  • Investor 路 San Diego, CA 路 Member since 2017 路 7 posts 路 2 votes
    8y

    Congrats on your 1st deal! The house rehab done is really simple and perfect for renters. Keep it up!

  • Mount Pleasant, SC 路 Member since 2018 路 26 posts 路 9 votes
    8y

    Congratulations on getting started.

  • Richmond Hill, NY 路 Member since 2017 路 6 posts 路 3 votes
    8y

    excellent

  • Walnut, CA 路 Member since 2017 路 47 posts 路 13 votes
    8y
    Congrats !! Looks like you did a really good job 馃槵
  • MD 路 Member since 2017 路 35 posts 路 13 votes
    8y
    Congratulations! And your work looks great! Hope this is the first of many for you!
  • Real Estate Investor 路 metairie, LA 路 Member since 2013 路 9 posts 路 3 votes
    8y

    Awesome Vincent! Keep it up!

  • Christi HawkinsPro Member
    Columbus, OH 路 Member since 2017 路 239 posts 路 142 votes
    8y

    Congratulations!!!! I want to hear more about this kit to paint counter tops!!!

  • Real Estate Agent 路 Syracuse, NY 路 Member since 2017 路 19 posts 路 12 votes
    8y
    Congratulations! Good work.
  • Multifamily Syndicator 路 Houston, TX 路 Member since 2016 路 1k+ posts 路 2k+ votes
    8y

    I just enjoy seeing how one success story can really inspire and motivate others to keep ploughing ahead! 

    馃槂
  • Fairfax, VA 路 Member since 2016 路 164 posts 路 54 votes
    8y

    Congrats @Vincent Townsend! Looks great! 

  • Old Bridge, NJ 路 Member since 2018 路 1 post 路 2 votes
    8y

    Awesome story.  We are looking for our first rental, but we've got analysis paralysis lol!  We are up in central New Jersey.  Anyone know of any good areas for rental properties?

  • Contractor 路 East Bridgewater, MA 路 Member since 2016 路 26 posts 路 12 votes
    8y

    Congrats on the deal. I'm wondering....you say this is a long distance rental but you also did all the work, how did you manage that? Did you visit weekends or did you take a few weeks off from work? I'm looking at long distance because it's so expensive here but can't exactly take a month off from work for a rehab.

  • Investor 路 Pompano Beach, FL 路 Member since 2015 路 70 posts 路 20 votes
    8y

    good job on the deal Brother. I am a union plumber in florida. great to see a fellow tradesman making it happen.

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