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!
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!
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Adam Owczarzak You are going to make mistakes on your first deal, a lot of mistakes. Like a real lot of mistakes. There are a bunch of hot markets and I have seen bigger pockets forum posts on lists of these markets. Pick the one that is closest to you and learn a bunch about it, find a real estate agent from there through connections and start receiving auto mls updates. Save your money, make sure you account for at least 3% of closing costs in addition to your downpayment
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Laith Faouri oh awesome I am going to check that out! I was going to order the book but heard mixed reviews, plus I think there is a new edition coming out this month.
Rental Property Investor · Denham Springs, LA · Member since 2018 · 95 posts · 44 votes
6y
@Nicholas Sheridan, Jr. Really impressive for a first deal. These numbers are great! Almost makes me want to invest in your backyard. Congrats! Keep the ball rolling. Was it a move in ready property or did you have to do some repairs at that price point?
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Jayce Wagner Thanks Jayce ! Keep on working hard and make it happen. @Anthony H. I am actually from Denver so this was out of state. Thanks! Repairs were: new water heater, garage door, and then smaller rent ready stuff. I took care of most of the small stuff by myself.
Attorney · Washington, DC · Member since 2020 · 24 posts · 10 votes
6y
Excellent, @Nicholas Sheridan, Jr.! For the LLC transfer, did you have to pay any transfer/recordation fees? Did you transfer the title policy and insurance policy to the LLC? Lender okay'd the LLC transfer?
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@James Billings-Kang $29 quit claim deed fee. Will be doing that later this week once I receive the paperwork. It is apparently a very common thing to do and lenders don't seem to have an issue unless the note doesn't get paid on time
Real Estate Agent · Chisago City, MN · Member since 2019 · 11 posts · 8 votes
6y
@Nicholas Sheridan, Jr. what a great deal for your first investment!! Thank you for sharing your story and breaking down the details. It's very helpful to see that information as a newbie investor myself. Best of luck in your future investments!
Huge congrats! How are you able to make $421 cashflow if the rent is $1200 with all the monthly expenses you listed?
Based on those numbers, it comes to $435 a month cashflow actually, so clearly he's got a monthly $14 expense he's not disclosing, I'm betting on eithre water/trash, or he's splurging on coffee once a week while he looks for the next deal :D rent is $1250 very nice deal. Hopefully you can add enough equity to get most of your $30k back out and repeat!