Successful 3 Family Purchase in CT!
Super excited to be posting on this page about my first three family deal that we just closed on September 27th 2018. I wast just looking back on my bigger pockets account and noticed that I officially joined bigger pockets October 10th 2017.
So, almost exactly one year later I reached my goal of purchasing a 3 family investment property. I still remember originally making it a goal of mine to buy a property by the end of 2017 right after listing to @Brandon Turner 90 day challenge podcast.
Well needless to say after the 90 days and the end of 2017 I had not found a property yet. I was so frustrated and had this feeling that I had failed. Honestly this was not for a lack of effort and I kept my nose to the ground.
I recall during one of the post/articles or podcast ( I cant remember at this point) it was recommended not to buy a deal before you run numbers on over 100 property's. When I heard this I said to myself how the heck am I going to run numbers on that many properties... and then of course I figured I could buy a place before this no problem...haha.
Well its funny ... as I was reviewing my profile this week I decided to go back and see how many properties I had run numbers on using the bigger pockets calculators, and guess what my number was..... 135!
That's right I had run numbers on over 100 properties and didn't even realize it!
So, note to newer investors - take the time to run your numbers and understand how your numbers work in your market (this is so important)!
I truly feel that after walking over 40- 50 properties and running numbers on over 100+ properties it has allowed me to identify this property immediately and put it under contract within hours of it coming on the market.
The Why
This property is a really great accomplishment because I was able to do complete this entire transaction outside of my normal business hours. I work as an adviser during the day and run a marketing business at night. I have a wife and two little kids who are my everything. Starting in 2018 my wife started on the call schedule of her work in an effort for us to save as much as we could for the future and the coming educational expenses.
With her increased hours and my ability to "somewhat" control my schedule I decided that it would make the most sense to stay home with my kids on Thursdays. The hard part about this was that Thursday's are typically a very productive day in the work week. So, I decided that I needed to find an alternative income stream on my "days off" with the kids.
This led to real estate Thursdays! Yep, I devoted my full attention to my kids when I was home on Thursday and we would play, go to the the park, visit the aquarium and go to various museums. The best part was we needed to drive to all these places and once the kids had tired themselves out they fell asleep in the car! This is when I started to shop real estate. After the kids would go to bed I would run my numbers and schedule times to visit the property with my realtor.
Funny enough my kids started to get a kick out of it and would ask me " dad are we going to look for real estate?" Haha there was nothing better because I was able to share my passion with my kids.
With the help of my kids, one day per week I was able to turn Thursdays with my kids into an asset that will help pay for college.
This is WHY...
The Deal (Numbers):
3 unit property
Ask: $315,000
Purchase Price: $293,000
Down Payment: $73,250
All in cost: $83,250
Gross rents currently: $3,475/mo
Insurance: $204/mo
Utilities: 60/mo (We only cover water, tenants are paying all other utilities)
PM: 8% (paying ourselves, but included in expense costs)
Repairs: 5%
Capex: 8%
Vacancy: 5%
NOI: $23,040
Cash Flow: $637.60
Cash on Cash: 9.19%
The Future:
Really excited for what is to come. My goal is to continue to purchase cash flowing multi family properties at a minimum of 1 per year here in CT. Ideally I would like to find ways to buy more and faster. My cash flow goal is $6,000/month however it is clear that it is important to have solid deals and not get caught up hitting that number. Larger commercial real estate (5 - 32 units) are of great interest to me and I would be very interested in obtaining a deal like this.
Big shout out to @BiggerPockets .com and all the members for the constant support education and motivation. You are changing lives and are a big reason why I have this deal today.
Cheers!
