VICTORY! I finally did it

VICTORY! I finally did it

Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes

Just closed on my first SFH 2 weeks ago and I am AMPED to have finally defeated paralysis analysis and joined the club. Quitclaim deed has been initiated and the property is officially in the LLC's name. Let the fun begin! Here are the dirty details:

  • Purchase price: $112,502
  • 25% down
  • 3.375% int rate (paid ~ $1,500 in points)
  • 3 bed 2 full bath with 4th non-conforming bed in the basement
  • Detached garage and carport
  • Property taxes $1,127
  • Insurance $1,050
  • Property management 5%
  • Rent $1,250
  • Vacancy rate 5%
  • Maintenance and repairs 6%
  • Oh **** fund 5%
  • Cash flow $421/month

My main issue going forward (like many fellow investors) is having enough capital to purchase more properties. I am able to find great (> 1% on the 1% rule) properties but I don't want to wait 6 months to save up enough cash. Time to get the BP book on no and low money down and also find some partners!

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Scott TrenchPro Member
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
6y

@Nicholas Sheridan, Jr. in light of your post, we are going to officially relabel the “capex reserve” in our calculators the “oh sh** fund”. This is far more intuitive.

Congratulations on what seems like a great first step!

See this reply in the discussion

185 Replies

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  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Thomas Greer Thank you!

  • Peoria, AZ · Member since 2018 · 33 posts · 12 votes
    6y

    @Nicholas Sheridan, Jr.

    What mistakes did you make and what would you do differently?

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Cynthia Reddy negotiate the price down based off of a more rigorous inspection!

  • Investor · Athens, GA · Member since 2015 · 205 posts · 66 votes
    6y
  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    Thanks @Brad E. !

  • Investor · Atlanta · Member since 2016 · 57 posts · 54 votes
    6y

    Congrats @Nicholas Sheridan, Jr. It's a great feeling getting that first one completed. Like you I'm working on keeping the momentum going. Networking and more networking is what I'm doing presently. 

    Keep it up man!!

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Kevin Leonce Thanks! Yes that is definitely an area where I need to develop. Good luck! 

  • Member since 2017 · 36 posts · 24 votes
    6y

    Was the property previously owner occupied? Reason I ask: will taxes go up without homestead/owner occupant deduction?  Different locations do it differently, but that's how it works in my area.

  • Rental Property Investor · New Albany, IN · Member since 2020 · 2 posts · 0 votes
    6y

    @Nicholas Sheridan, Jr.

    That is AMAZING!! Beyond happy and rooting for you!

  • Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
    6y
    Originally posted by @Patrick Pierre:

    Huge congrats! How are you able to make $421 cashflow if the rent is $1200 with all the monthly expenses you listed?

    Hey Patrick! I think that's his cash flow before making his mortgage payment? Our market is pretty similar to KC and ~$400-$500 is typical pre mortgage payment. 

  • Member since 2020 · 437 posts · 675 votes
    6y

    Couple of questions:

    1) Seems like the cash flow in KC trumps Denver but did you make any assumptions on appreciation of the property? What if Denver appreciates faster?

    2) Whats the logic behind 5% vacancy. If the unit is vacant for 1 month that is a minimum 8%. Are you assuming a 2 week vacancy?

  • Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
    6y

    @Nicholas Sheridan, Jr.

    Best of luck in your real estate investing journey!

  • Wholesaler · San Diego, CA · Member since 2019 · 7 posts · 1 vote
    6y

    @Nicholas Sheridan, Jr. congrats!

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Ben Haab I have never heard of such a thing.

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Krista Young thank you! Been a long time coming

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Kiera Underwood my cash flow after every single expense and mortgage payment is what I stated. Not sure why there is confusion on this

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Aigo Pyles thanks!

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Lawan Brown Thanks!

  • Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
    6y

    @Justin Thorpe I could care less about appreciation. If I wanted to gamble I would take my money to the stock market. If the numbers work up front then they will always work.

    I wanted to put a number and felt 2 weeks was a sufficient time period for a tenant to move out and repairs to be done. PMs job is to have a new tenant selected before old tenant moves out

  • Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
    6y

    @Nicholas Sheridan, Jr. huge congratulations!!!

  • Member since 2017 · 3 posts · 1 vote
    6y

    @Nicholas Sheridan, Jr.

    Good to hear man! I’m just beginning the process of trying to understand my local market better to see if there is any possibility of finding deals here or if I need to look elsewhere. The hardest part for me is getting overwhelmed with how much I need to and where to start. Any advice on how to start out?

    I’ve been reading plenty of books and listening to podcasts but having a hard time of where do I go from there? I don’t have enough cash yet so in the mean time I’m reading more and then trying to understand the market and build a team. Plus I don’t want to really buy anything until the virus issue calms down. But I want to try to have my team members in place so that when a property becomes available i am ready to go.

  • Austin, TX · Member since 2019 · 95 posts · 59 votes
    6y
    Congrats on your first deal! Awesome! What property management company do you use at 5% in KC if you don't mind me asking? That is incredibly low.
  • Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
    6y

    I took that plunge last year and never looked back. You will not regret taking that first step.  Financing always a challenge.  Great job, Nicholas!

  • Tampa, FL · Member since 2020 · 8 posts · 5 votes
    6y

    @Nicholas Sheridan, Jr.

    Great job!

  • New to Real Estate · Puerto Rico · Member since 2020 · 18 posts · 6 votes
    6y

    Congrats man!!! I wish you the best and hope that you get all the deals you can possibly get!

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