My first Deal
I wanted to talk about my first deal I invested in, in other words an actual property. Besides my investing in real estate stocks (Reits), For years I didn’t know what I wanted to do in real estate.
Well, after seeing a video on creative financing, I knew right there and then, this is what I wanted to do, so I gathered as much knowledge on the subject as possible, books, video’s and courses to learn what I needed to learn, how to make offers etc.
The Process
Now that I had the knowledge and confidence that I can do this! it was gathering a team to help me invest away from my hometown of New York City.
So the first thing I did was look elsewhere, and I picked my city- Pittsburgh Pa, next is was a realtor, boom- found one, after explaining to him what I wanted to do, he was on board. Next was gathering the team to complete the investment.
- Realtor
- Property scout (to view property)
- Property inspector
- Mortgage broker
- Loan servicing company
The Team
Let’s go one by one with the team and where you can find them, And when it comes to these companies, please do your due diligence, as companies do come and go.
Realtor: I went to realtor.com
Property Scout: I Put an ad on craigslist
Property Inspector:https://www.npiweb.com/Find-An-Inspector or wegolook.com
Mortgage Broker: https://www.angieslist.com/companylist/pittsburgh/mortgage-companies.htm or your market.
Loan Servicing: Google it to your market
The Property
Once I had my realtor and explained my niche, here how it went. I had picked the single family 3 beds / 2 bath property I was interested in needed more of cosmetic upgrade it was in good condition , it was bank owned, asking price was $27,000, I offered $8,000 in cash and was turned down.
About two weeks later or so, The realtor called me and asked if my offer is still available, I said yes and the same price, I should have offered $5,ooo instead of the $8k I had first offered, it’s a lesson learned.
The tenant/buyer was found by the realtor, his credit wasn’t that good, but he had the money and a good job to qualify, needless to say that since September 2017 the tenant buyer has paid on time. And the cash flow is positive.
The Terms Are:
I own it free and clear, and the tenant/buyer’s term is for 96 months
Purchase price $8,000
Sold for $27,000
Term 96 months @ 8% interest
Mtg $379.16 -$35.00 (loan serv fee) =$344.16 cash flow
Taxes and insurance paid by buyer. (But I set aside 50% just in case)
Thank you for reading, please stay safe.