Hot take: Your first deal SHOULD be messy, uncomfortable, and borderline stupid…

Little Rock, Arkansas
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Hot take: Your first deal SHOULD be messy, uncomfortable, and borderline stupid…

Chase Calhoun
Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes

Hot take: Your first deal SHOULD be messy, uncomfortable, and borderline stupid… and mine definitely was.

In 2017, I bought a house in Little Rock sight unseen from California for $28,250.

It was a foreclosure listed on Zillow.
It looked rough online.
In person? It was basically unlivable.

My now wife and I moved across the country, camped in the converted carport room, and lived inside the renovation zone. Full gut remodel.
New HVAC, plumbing, electrical, everything.

Rehab cost: ~$55,000
Financing: cash + 0% interest credit cards
(Yes… the classic rookie move.)

After fixing it up, we rented it for $850/mo.
Today that same house rents for $1,200/mo and is worth around $135k+.

Looking back, I probably should have run screaming.
But honestly?

The only thing that really went right was the decision to start and not quit when it got painful.

That one decision kicked off everything I’m doing today in construction, BTR, and investing.

Curious:
What was YOUR first deal like?

Was it as chaotic as mine, or was I just insane for moving into a foreclosure with no real plan?

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John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
11mo

My first deal (10 years ago) was an offer over email to the listing agent for fun after a couple beers. I offered 128k cash to close in 2 weeks. I only had 25k in savings and was making 40k/year. They countered a couple beers later and I accepted. I woke up the next morning and asked my wife if we bought a cabin in Branson, MO. lol. Wasn't smart of me to jump into real estate this way with no due diligence and not much $ to my name. But I figured it out after this purchase and have scaled up to 31 SFR. No regrets on any purchases!

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  • Eric Gerakos
    Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
    11mo

    Yes, you were insane.

    1Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @Eric Gerakos:

      Yes, you were insane.


      I thought so, just making sure!!!  Especially looking back at it.

      0Reply
  • Eric Gerakos
    Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
    11mo

    Buying a cheap foreclosure is an area with poor appreciation and a poor tenant pool is not something that any new investor should emulate. So a new investors first deal should NOT look like that.....

    1Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @Eric Gerakos:

      Buying a cheap foreclosure is an area with poor appreciation and a poor tenant pool is not something that any new investor should emulate. So a new investors first deal should NOT look like that.....



      Appreciate the perspective, Eric and I actually agree with a lot of what you’re saying. Buying a cheap foreclosure in a rough area with questionable appreciation and a tough tenant pool isn’t the model I’d recommend for a new investor either.


      The point I’m trying to get across is a little different.


      When I got started, I genuinely didn’t know what I was doing. I hadn’t heard of BiggerPockets yet, there weren’t nearly as many resources available, and I didn’t have a mentor. I just knew I wanted to get into real estate, so I jumped in. It was messy, stressful, and far from ideal. But taking imperfect action ended up serving me far better than if I had sat on the sidelines trying to design the “perfect” first deal.


      I’m not saying everyone should replicate the path I took. In hindsight, it was definitely crazy, and I wouldn’t recommend it to most people. But I am saying that at some point you have to make the decision to get started, even if the deal isn’t textbook perfect. Action compounds, and that first step opened the door to everything that came after.


      Maybe we agree to disagree on the approach, but I respect the discussion.



      1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    11mo

    Mine was anything but that. A foreclosure condo for $20k that we could get access too in Basye VA. Put $25k into it, had it rented long term for $750/mo and then sold it several years later for $120k. It was very easy. Next one was a foreclosure for $70k put $30k into it. BRRR it to a 15 year note that pays off in 4 years and is cash flowing $300/mo.

    I like simple. I worked in commercial construction and ran a MF division of a company. so have seen a lot of hair raising things - but for my portfolio, I like to keep it simple and stick with stuff I am confident of.

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    1Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @Chris Seveney:

      Mine was anything but that. A foreclosure condo for $20k that we could get access too in Basye VA. Put $25k into it, had it rented long term for $750/mo and then sold it several years later for $120k. It was very easy. Next one was a foreclosure for $70k put $30k into it. BRRR it to a 15 year note that pays off in 4 years and is cash flowing $300/mo.

      I like simple. I worked in commercial construction and ran a MF division of a company. so have seen a lot of hair raising things - but for my portfolio, I like to keep it simple and stick with stuff I am confident of.




      Love it, those sound like fantastic first deals, and definitely a much less stressful way to get started than the path I took. A $20k condo that turns into a long-term rental and later sells for $120k is a home run, and the BRRRR on the second property is exactly the kind of simple, repeatable model that builds long-term stability.
      0Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    11mo
    Quote from @Chase Calhoun:

    Hot take: Your first deal SHOULD be messy, uncomfortable, and borderline stupid… and mine definitely was.

    In 2017, I bought a house in Little Rock sight unseen from California for $28,250.

    It was a foreclosure listed on Zillow.
    It looked rough online.
    In person? It was basically unlivable.

    My now wife and I moved across the country, camped in the converted carport room, and lived inside the renovation zone. Full gut remodel.
    New HVAC, plumbing, electrical, everything.

    Rehab cost: ~$55,000
    Financing: cash + 0% interest credit cards
    (Yes… the classic rookie move.)

    After fixing it up, we rented it for $850/mo.
    Today that same house rents for $1,200/mo and is worth around $135k+.

    Looking back, I probably should have run screaming.
    But honestly?

    The only thing that really went right was the decision to start and not quit when it got painful.

    That one decision kicked off everything I’m doing today in construction, BTR, and investing.

    Curious:
    What was YOUR first deal like?

    Was it as chaotic as mine, or was I just insane for moving into a foreclosure with no real plan?

    I agree with your drive and motivation. I can’t say I fully agree with your title and that’s what new Investor should do or look for. 

    On a sidenote, it looks like you decided to stay in Little Rock as a contractor. I hope things work out well for you going forward. Don’t know if you went to pinnacle Mountain yet but it’s a pretty enjoyable hike there near Little Rock.
    0Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @Joe S.:
      Quote from @Chase Calhoun:

      Hot take: Your first deal SHOULD be messy, uncomfortable, and borderline stupid… and mine definitely was.

      In 2017, I bought a house in Little Rock sight unseen from California for $28,250.

      It was a foreclosure listed on Zillow.
      It looked rough online.
      In person? It was basically unlivable.

      My now wife and I moved across the country, camped in the converted carport room, and lived inside the renovation zone. Full gut remodel.
      New HVAC, plumbing, electrical, everything.

      Rehab cost: ~$55,000
      Financing: cash + 0% interest credit cards
      (Yes… the classic rookie move.)

      After fixing it up, we rented it for $850/mo.
      Today that same house rents for $1,200/mo and is worth around $135k+.

      Looking back, I probably should have run screaming.
      But honestly?

      The only thing that really went right was the decision to start and not quit when it got painful.

      That one decision kicked off everything I’m doing today in construction, BTR, and investing.

      Curious:
      What was YOUR first deal like?

      Was it as chaotic as mine, or was I just insane for moving into a foreclosure with no real plan?

      I agree with your drive and motivation. I can’t say I fully agree with your title and that’s what new Investor should do or look for. 

      On a sidenote, it looks like you decided to stay in Little Rock as a contractor. I hope things work out well for you going forward. Don’t know if you went to pinnacle Mountain yet but it’s a pretty enjoyable hike there near Little Rock.


      Thanks Joe I appreciate that.

      And yes sir, Little Rock has become home base for us. We’ve been here about eight years now, and it’s treated us really well. Pinnacle Mountain is an awesome hike, beautiful views, and it’s been a while since we’ve made it up there, so your comment is a good reminder to get back out soon.



      1Reply
  • Zul BudhwaniPro Member
    Investor · Grapevine, TX · Member since 2016 · 78 posts · 39 votes
    11mo

    I completely agree! The first deal is often a chaotic and uncomfortable experience, but that is where growth happens for hands on investors. Taking that leap, even when things feel messy or borderline ridiculous, can lead to incredible opportunities and learning. 


    @Chase Calhoun your journey is a perfect example of turning a challenging situation into a successful investment. Personally I think that over-analyzing or analysis paralysis can lead to missed opportunities or poor decision-making.

    0Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @Zul Budhwani:

      I completely agree! The first deal is often a chaotic and uncomfortable experience, but that is where growth happens for hands on investors. Taking that leap, even when things feel messy or borderline ridiculous, can lead to incredible opportunities and learning. 


      @Chase Calhoun your journey is a perfect example of turning a challenging situation into a successful investment. Personally I think that over-analyzing or analysis paralysis can lead to missed opportunities or poor decision-making.


       Love it!  Very much agree.  I would bet money that Analysis Paralysis/ never starting has ruined far more real estate investor careers than bad deals ever have.

      0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    11mo

    My first deal (10 years ago) was an offer over email to the listing agent for fun after a couple beers. I offered 128k cash to close in 2 weeks. I only had 25k in savings and was making 40k/year. They countered a couple beers later and I accepted. I woke up the next morning and asked my wife if we bought a cabin in Branson, MO. lol. Wasn't smart of me to jump into real estate this way with no due diligence and not much $ to my name. But I figured it out after this purchase and have scaled up to 31 SFR. No regrets on any purchases!

    3Reply
    • Chase Calhoun
      OP
      Property Manager · Little Rock, AR · Member since 2018 · 59 posts · 47 votes
      11mo
      Quote from @John Morgan:

      My first deal (10 years ago) was an offer over email to the listing agent for fun after a couple beers. I offered 128k cash to close in 2 weeks. I only had 25k in savings and was making 40k/year. They countered a couple beers later and I accepted. I woke up the next morning and asked my wife if we bought a cabin in Branson, MO. lol. Wasn't smart of me to jump into real estate this way with no due diligence and not much $ to my name. But I figured it out after this purchase and have scaled up to 31 SFR. No regrets on any purchases!

       Thats awesome!  I'm glad I'm not the only one who jumped in without a great plan and had it work out for the better.  I would be where I am at today of not for that messy first one and would trade my life today for any other.  On a side note, Branson is a great area.  We are actually heading up there on Monday for a few days and then heading to Springfield to visit family for Thanksgiving.

      0Reply
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