It seems like everyone here is an experienced vet and I was wondering how your first investment went.
What mistakes did you make? Did you have alot of cash and credit at the time? What type of investment was it?
My first investment was a multiplex. it had 9 apartments, and a separate 7 rooms with a common bathroom / shower.
It was for 279,000. The per unit cost for just the 9 was excelent, the 7 extra rooms were just a bonus.
since it was for over 5 units. it was a commercial deal, and the lower price enabled me to show high potential increase.
I got traditional commrcial funding for 95% of it. I wanted to retain my down for the costs of upgrading and raising rents. So i looked for a short term hard money loan. i called a guy, he said he didn’t do that small of loans. All i needed was 7000. He saw my motivation and wanted to know what was in it for him… i knew at this point he was working me to get my answer. I told him in 3 months i’ld pay it all back and it will be 10,000 i pay back. He couldn’t refuse 1000 a month. so he did it for me.
I had it funded. Then i had to get it up, i raised rents and spruced the building up as fast as i could, I was handy and knew a lot about remodeling already those skills helped me. I had enough money to live off off for 3 months very very frugal. I saved up he 10,000 with the cashflow, and paid the hard money off. My building had gone up in value with just me raising the rents. Commercial properties get judged by income they produce.
I then began my flipping houses and 1031ing them to the next till i paid one off completely on my 5th rehab. I have continued that since. aquiring enough leverage to expland to Alaska, Oregon, Washington… and hopefully soon California, I’ld like some really high forced equity numbers.
1031- is that when you put your money from the sale in an account until your buy your next house to avoid paying taxes?
yes it is. i don’t touch the money it gets held in an excrow account for up to 180 days. I find a home within then, it goes towards that home in equity allowing me easier financing because only one mortgage is needed and no mortgage insurance. No higher intrest 2nd to piggyback.
it accumulates quick using that tool for me.