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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Most Popular Reply

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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  • New to Real Estate · UPstate NY · Member since 2019 · 8 posts · 1 vote
    6y

    @Nicholas Sheridan, Jr. CONGRATULATIONS!!!

  • Contractor · WI · Member since 2019 · 34 posts · 15 votes
    6y

    @Nicholas Sheridan, Jr.

    Congratulations!!! That is an excellent start. Sounds like you have a great market. I wish our property taxes were that low in my market.

  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    6y

    Awesome! You can read all the books you want but until you actually buy your first one you won't see how it all works. Congrats!!!

    Keller Williams Citywide | Dave Poeppelmeier534 Reviews
  • Rental Property Investor · Norfolk, VA · Member since 2019 · 7 posts · 0 votes
    6y

    @Nicholas Sheridan 

    It is always nice to see new success stories (for motivation to new investors like me) with the first venture completed in hand. Congratulations. 

  • Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
    6y
    Originally posted by @Nicholas Sheridan, Jr.:

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

    It's just a little high! But with 25% down and a low-interest rate I totally see it. Great work! 

  • Rental Property Investor · MA · Member since 2020 · 98 posts · 77 votes
    6y

    @Nick Coble

    Thats great thanks for sharing!

  • Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
    6y

    Congrats @Nicholas Sheridan, Jr. - that's something I try to advise all new investors of. Unless you have unlimited savings and/or insanely high income, you need an escape plan for you money. How are you going to get your money out of the deal? Your financial situation will determine what % you need to get out and over what time frame. If your goal is to build a large portfolio you need to deploy your money strategically. That can be by BRRRR, seller financing, seller 2nd, getting a money partner, assuming a mortgage etc. You don't have to pick one strategy. I'm often in the position of considering multiple acquisitions, developments and rehabs. And I map everything out in a timeline to figure out how to make them all happen using different strategies for each.

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

    @Alec Frasier thanks! good luck to you as well, sounds like a fun project

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

    @Salvatore Lentini very smart, yes I definitely should have put down less money on this one, that was my biggest mistake for sure. What is assuming a mortgage?

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

    Thanks @Nick Coble the next big hurdle (I am sure every investor has this issue) is securing financing. Just remember that there is no need to learn absolutely everything about REI before you jump in

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y

    Well done! You're smart to wait until reserves are built before buying again.

    I'd put a 1 before your 5% PM estimate.  15% is closer to reality  FYI.

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

    @Bariso Sora @Jay Bob @Tanisha Thompson @Ben Baye Absolutely, can't learn everything from a book!

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

    @Steve LeBlanc if your PM is charging you 15% they better be doing the repairs themselves lol. 15% is the highest amount I have ever heard, I am pretty sure that on BP 8-10% is common, my 5% is already locked in with a PM.

  • Investor · Westminster, CA · Member since 2008 · 17 posts · 2 votes
    6y

    @Nicholas Sheridan, Jr. Congrats! Just wondering how did you cope with this corona virus restriction. Did you have to fly to KC?

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

    @Ryan Nguyen Did the 9 hour drive there for the inspection and drove back the same day with my wife (yes we are still married haha). Then after closing drove there again for a weekend to do some rent ready items. 

  • Rental Property Investor · Madison, WI · Member since 2020 · 18 posts · 14 votes
    6y

    @Nicholas Sheridan, Jr.

    Great job! Looks like an awesome deal.

  • Rental Property Investor · Plant City, FL · Member since 2015 · 1k+ posts · 379 votes
    6y

    Congrats! 

  • Rental Property Investor · Dracut, MA · Member since 2020 · 24 posts · 4 votes
    6y

    @Nicholas Sheridan, Jr. how was the process of the quitclaim transfer to the LLC?! I have a few properties I would like to transfer to my LLC but have no idea how get it started.

  • Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    6y

    Great job!

  • Alexis GuiniPro Member
    Real Estate Broker · Doral, FL · Member since 2016 · 62 posts · 11 votes
    6y

    Congratulations Nicholas! People always says: "The first one is the most difficult" and I can't agree more!

  • Rental Property Investor · Member since 2020 · 3 posts · 0 votes
    6y

    @Nicholas Sheridan, Jr. Awesome! Congrats!

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

    @Carmen Alvarado extremely simple. Had to fill out a quitclaim deed (2 page paper) for the title company and send them a check for $29

  • Rental Property Investor · Dracut, MA · Member since 2020 · 24 posts · 4 votes
    6y

    @Nicholas Sheridan, Jr. did you had to contact your mortgage holder?!

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