How I bought my first Investment Property

How I bought my first investment property

All the details on how I finally took the plunge!.

I BOUGHT A HOME TO RENOVATE AND THEN SELL!

This has been a dream of mine for YEARS. When I look back I see a lifetime of influences, twists and turns that have led me to this very place.

So after 20 years in the real estate industry and 15 years working as a real estate agent I finally felt ready. It wasn’t just a matter of feeling ready in terms of overcoming the fear of failure and knowing I had the knowledge and skills to pull off flipping a home. I had to come up with the cash necessary to put down on the home, begin the renovation process and pay the carrying costs until I was able to sell the home. This was just as difficult as the “feeling ready” part it turns out.

I saved money over the course of several years as my real estate business grew and put it aside specifically for investing in real estate. I was also connected to a colleague of mine who had experience in flipping homes. She and I got to know each other over the course of 1.5 years and when the right opportunity popped up we felt like we were ready to jump on it together.

I was not actively looking to purchase an investment property at the time that we found the Cavendish Cottage. I was out of town actually, visiting my Mom, and saw the home online. I sent it to Madeline and she decided to stop by and take a look. She took a video with commentary and sent it to me. I googled a few different ways to assess the viability of a flip and we decided if we could get the home for about $100k under asking it would work. I felt confident that the owners would NOT accept our offer so writing it up wasn’t too stressful.

Then, things got real. The owners responded to our offer at $85k under asking. I ran the numbers again. This would still work. OMG. Madeline and I both agreed that making a ton of money wasn’t really the goal. The goal was getting our foot (feet) in the door and growing our investment capital little by little. In fact, just renovating a home and being able to share about the progress is great for our individual real estate businesses. I just wanted to learn the process so my goal from the beginning has been to break even (I.e. not lose money).

So what began as a shot in the dark became my first real estate investment and we were officially under contract. To say I was in shock was an understatement. I felt numb, scared and excited all at the same time. There was no turning back since we had written an offer with no contingencies so I had no choice but to put one foot in front of the other.

We went through the financing process, providing all of the necessary documents, started an LLC and opened a bank account together. Our closing period was about 2 months and then on October 20th, with a very pregnant business partner, we wired our funds to the title company and officially closed on what we now refer to as the Cavendish Cottage.

A lot has happened since then, as I write this in late December. But all in all it’s been exactly what I expected - in a good way. There have been unexpected set backs, money issues, additional repairs as well as the high of witnessing the transformation of a home, the thrill of hunting for the perfect paint color, light fixture etc. I have found renovating a home to be the ultimate creative endeavor. The process of taking something old and making it better, attempting to stay true to the original charm of the home while making it feel fresh and new and problem solving on a daily basis has been satisfying to say the least.

We haven’t finished the home yet. Nor have we sold or made or lost any money so the story is far from over. But I hope this is the first of many home renovations for me. So far it’s been just what I had hoped - a dream. come true.