My First Real Estate Investment | How To Buy Your First Condo

How bought an under market value condo for $210,000, how I actually pay just $360/month for it, and my plan to rent it out in 12 months and repeat the process.

Click the link below to see a full tour of my condo. I have an in depth commentary about some of the cosmetic deficiencies!

https://youtu.be/nHd2dH5EAe4

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Intro (0:00)
Home Buying Process (1:21)
Details of My Wedge Deal Purchase (3:10)
Cashflow Breakdown and Tax Savings (5:22)
Rental Cashflow Breakdown (9:46)
Real Estate is Easy & Lucrative! (12:19)
Real Estate Course (15:25)
I was looking for 2 or 3 bed condo/townhouse, starter home, at or below $200K - hard to find in Atlanta unless you really want to slum it. Also wanted to find something I can rent out in future (HOA), cuz I'm on the meet kevin plan
1. I started saving for condo in April of 2020. I knew corona was going to upset the housing market a bit, so I decided I'd start saving to make my move.
2. I was saving about $2000 a month… most of this was from not having to pay rent.
3. Instead of using a savings account, I used a low risk score wealthfront account, over the course of the spring, I was able to almost double my money because the market ran up so much, So I had my downpayment a lot faster than I anticipated.

I initially went into escrow for a condo that I soon realized would require a lot more renovation work than I wanted to, especially for my first property. So I pulled out when I found the deal I knew was right.

Deal details -
original list price was $235k, in feb, then dropped to $225 in May, and then finally dropped to $215 in june - previous owner had already moved to take a new job, so he was a very motivated buyer. The listing had also become quite stale (sat on market too long), and the previous deal at $225k had fell thru.
Speculation on why price had to drop
1. Quarantine panic
2. Missing certain cosmetic improvements (fans, popcorn ceiling, outdated lighting fixtures) - the $30K drop was my wedge
Ended up buying for $215, with a $5k closing cost credit from the seller, so my net was $210k

Comps This is a 1000 SF, 2 bed 2 bath, so the comps were pretty easy to look at, since there are about 100 other condos in the same development

Property purchased was below median in terms of cosmetics - no nice carpet, outdated outlet and switch plates, popcorn ceiling, Formica countertops. Only thing that was median (or a bit overimproved) were the really nice hardwood floors (don't wanna think about how much money the previous owner threw at that) and this crown molding in the living room.
Comp 2: Sold for $225 in may of 2020
Comp 4: Sold for $241.5 in march of 2020
Estimating I got this for about $8,000 to $18,000 below market value

Because of this wedge deal, mostly due to condition (condition wedge), there was no negotiation. It was not necessary. In fact the seller was firm on price.

For financing, I used a 30 year fixed rate loan, with 5% down, with an interest rate of 3.25%.

My total due at signing was $15,200 but since we got the $5,000 seller credit, my total due at closing was $10,200.

Important, because I want to hop to another property in 18 to 24 months, needed to make sure that I could, per the HOA leasing restrictions.

How I'm living here for $360 a month actually
1. Payment is $1067 + $381 + $utilities
2. Tax benefits of interest, MIP, property taxes
3. Additional savings: principal paydown
4. Additional savings: home office deduction
5. That’s how we get to $360 per month

Future rental income
Rental income comps
1. Apartment buildings - not so good (too many amenities, too new, too much scale)
2. Small houses - better, but hard to find 2 bed 2 bath condos, townhouses in area
3. Other rentals in community - best comparables!
Will rent after I get reappraised and PMI is dropped!

My iPhone filming rig: https://amzn.to/2SHknTQ
My wired lightning port mic: https://amzn.to/37la9ht
My very affordable tripod: https://amzn.to/31O6x6l
Auxillary lighting: https://amzn.to/2ONMQ9o
Tripod extension plate: https://amzn.to/2OObV4q
Tripod-mounted aux lighting: https://amzn.to/2tNmrRU

-Disclaimer: There may be affiliate links in the description above, which means I may receive a small commission which really helps the channel!

-Disclaimer: I am not a financial, investing, tax or legal advisor. The information presented is for entertainment and should not be taken as financial, investment, tax or legal advice. I invest based on my own research and principles. I am not responsible for any financial losses that may result from following my actions. Do your research and develop your own investing philosophy!

#realestate #wedgelife #wedgedeal #condo

Видео My First Real Estate Investment | How To Buy Your First Condo канала Ian Seabrook