Hi BP Community!
Wanted to thank everyone for their awesome insight (and @Mindy Jensen) for convincing me to sign up.
Tomorrow, (If everything goes to plan) I will be closing on my first 4 plex. This deal has been a complete cluster from the get go and I'm happy to be at the finish line. Here's a bit of backstory.
I had always wanted to get into real estate, but my then wife was very risk averse and against it. We ended up parting ways (not because of that) and I decided it was time. A few months after the split, I found a nice 4 plex in my town that was in pretty good shape and I'd house hack. On January 15 I put in an offer that was accepted. I was still waiting on my ex wife to refi the house (she kept it) so I knew i'd need to put closing as far as possible to make sure the bank could process everything as I'd need the refi money for the downpayment here.
The seller accepted my offer and 2 days later a water heater blew up on them and apparently the tenant they were in the process of evicting did not notify them. I used this to get more due-diligence time and we went under contract on 1/18.
At the end of the due dilligence it was clear that the bank my wife was using was happy taking their sweet time and I wouldnt have the cash in hand by the time I was supposed to close.
Instead of accepting this and letting the deal fall through, I reached out to @Travis Speer and spent 15 minutes on the phone with him. It was probably the most valuable 15 minutes of my life. He could not lend to me, though he connected me with many people who could. Acting on a few of his other suggestions, I got on the phone and got in touch with a few mortgage brokers. I was able to secure an FHA loan and they were able to get the deal done, as long as I could convince the sellers to move the closing.
After giving up most of the closing costs I negotiated, the sellers agreed to push back closing and asked for a bit more earnest money.
I started renting from the seller, with the assurance that in 3 weeks we would close.
Then the FHA inspection came back, and they were rather nit-picky and said we needed over 6k in repairs that I knew the seller wouldnt bother paying for. However, I wasnt ready to let the deal die after all this time, money and energy had been put in to it. I spent about 10 hours (and $250) painting chipped paint, Installing some smoke detectors and replacing a window, but was able to keep the deal alive.
Im scheduled to close tomorrow, and since I STILL dont have the refi cash from my other property, I'll be looking for either my first flip or another multi unit with that money.
Lessons Learned:
Don't give up. There's always a way to get the deal done if you work at it.
You dont need a lot of cash to get started. Look into FHA Loans, VA Loans, 203k loans and I even saw a thread here earlier this week about a portfolio lender who was willing to do 3% down as long as you did not own property already.
Stop reading BP, start analyzing deals. You can read and read and learn all you want, but you're really just preventing yourself from taking action while still allowing you to feel good about yourself because you're still learning (ie, you think you're taking action but you're not).
Deal Stats:
Units: 4 (2 duplexes with a shed and connecting roof)
Rental Income: 2400/Mo, 28,800/year - though only 1800 when Im living there.
Cost: 220,000, 3.5% down with FHA, 30 years at 3.25%
Cash invested: ~9,000
All units full right now, further deal analysis in this thread
Plan is to do renovations on the unit I'm living in, purchase another multi unit in town, a flip in town, a turnkey out of town (have been looking at KC, Cleveland and Indy) with the refi cash and building an income stream from REI.
