Thread by @ColeFrechou, OKAY IT'S HERE! As most of you know I closed on my [...]

OKAY IT'S HERE! As most of you know I closed on my first rental property yesterday, and now as promised I will be breaking down how I actually acquired this asset.

This is how I did it, I'm sure there are other, possibly better ways to go about it, but this is how I did it.

I can't think of an actual date, but sometime in 2016, I realized that real estate is a great way to build wealth. I was too young to actually own any RE in my name, so I attended local REIA meetings (real estate investors association) to learn as much as I could in the meantime.

Fast forward to 12:00 AM on November 16th, 2019 (my 18th birthday), I was on the computer starting to build my credit by applying for credit cards for my mortgage pre-approval. At this point, I started to actually viewing properties.

I was approved for a 3.5% down FHA loan with my parents as co-signers. I realize not everybody has this available. Don't let that stop you, there are plenty of other ways to get into RE. DM me!

The way my loan was set up I couldn't get into multi-family with co-signers, so I started looking into single-family. After analyzing 100s of deals, viewing around 7 properties, and putting in 4 offers I finally got one accepted. That's the house you saw in the photo above

Alright, yall are probably ready to hear about the numbers now, but you should know a bit about me, I'm an 18-year-old business-owner/freelancer. Since 15 I have been selling photo prints and providing photography services in New Orleans. ( http://www.colefrechou.com )

You definitely don't have to be self-employed to do this honestly, it's more difficult. The banks love a good w-9 job to pre-approve you.

Here's some info about the property

3 Bed 2 Bath - 1050sqft located in a New Orleans suburb
Purchase price of $115,000
Rehab ~$4000
Rent after rehab $1100-1200

This cash-flow should only increase because of the location, rents tend to always increase across the board, and after I refinance I will get rid of my PMI insurance ($87/mo) I know, it sucks

I financed this using a 3.5% down FHA loan, now a lot of you may know that this is an owner-occupied loan. I intend on living there for 1 year, and afterward turning it into a traditional rental. During this year I will have roommates paying me rent that will cover my mortgage.

Ended up with a 2.875% interest rate for a 30-year mortgage. Getting my credit started early really helped with this. I can do a thread on credit later on.

My mortgage with principal, interest, taxes, and insurance is $655/mo, so that's $400-500 cashflow without reserves (monthly 5% vacancy, 10% repairs and 5% capex).

I should be cash-flowing right around $220/mo after my very conservative rent, rehab, and reserve numbers.

My thoughts are that cash-flow should only increase because of the location, rents seem to always increase across the board, and after I refinance I will get rid of my PMI insurance.

Cash-flow isn't the only thing sweet about this deal. I'll have some renters paying down my note thus increasing my equity, and I will also speculatively have some appreciation because the city it's in is BOOMING.

I realize there are much better deals out there, especially in the multi-family world, but this was a safe investment that will provide some steady cash-flow for the years to come. I'm basically treating this as my retirement plan, haha.

So that's my first deal! What are yall's thoughts? It's not the best deal of all time, but it's not the worst. Hoping the deals get better and better especially with multi-family on the horizon. More on that another day.

If there's something yall would like me to dive deeper into, let me know, and ill try my best to answer any questions. I'm just getting started and still have a lot to learn. Appreciate all the support!

Also! If any of you all found this helpful make sure to retweet and like it! I will be doing many more threads just like this one!

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