After helping so many other people find investment properties, I’m writing this article to share my own personal journey with investment in real estate. I figure I can’t be that different, and if I can buy a property with $12,000 cash, and turn it into something that generates $1000+ per month, then other people would want to hear how that would be possible.

One of the main reasons I got into real estate was because I love the numbers. Aside from the numbers, the other pieces of the puzzle that I love about this type of investment is hunting down the opportunities and seeing renovations transform a place in a matter or weeks or months. I am constantly looking at properties on and off the market.

So… here’s the story of our first investment property:

My wife and I were looking for an investment property. Originally our search was narrowly focused to multiunit buildings – specifically 3-4 units. The goal was to find a value add property in a neighborhood where we would be comfortable living. This would allow us to utilize a 5% down payment since we would be owner occupants.

We had done our research, visited plenty of properties, had the preapproval ready to go, and as soon as we found ‘the one’ we could pull the trigger on it quickly. A big part of this was crunching numbers in my excel sheet.

We thought we had a great purchase when we won a multiple bid situation on a 4 unit building in Logan Square. It had 3 units in front and a coach house in the back. We planned to renovate all kitchens, bathrooms, and install central heating and air. After the inspection, there proved to be some water intrusion in the bottom unit. Putting in drain tile and renovating an entire unit was NOT in the budget. While we thought we could still work out a deal, the seller didn’t want to budge on giving any credit, so we cancelled the deal and moved on to continue our search.

We were patient in our search and while I was browsing through some properties, I found a condo a couple blocks away from where we live. It seemed like it was too good to be true. It was a 3br/2ba listed at $240,000, and in the West Town neighborhood. The place needed full rehab, but the numbers worked well. Based on location, amount of space, and the way the numbers looked, we knew we needed to pivot from the multiunit strategy and buy this place. We made a full price offer and we were under contract quickly.

During the inspection, I had my contractor come through in order to verify that my estimated rehab costs were accurate – $50,000 was the budget and cost of the rehab. I didn’t have the entire $50,000, but I knew I could get a loan from a private lender at about 7% interest rate in order to cover any funding needed.

While the kitchens and bathrooms needed complete demolition, the project was largely cosmetic upgrades. $50,000 and about 3 ½ months later, the project was complete.

Currently, the property is being refinanced. At an appraised value around $475,000, we’ll increase equity from 5% to 25%, and we’ll be able to pull money out to pay back the rehab loan and also help fund the next project. After all the rehab and refinancing, the property is still cash flowing over $1000/month.

Hopefully this blog / article has been educational and inspirational. Contact me to learn more about my own experience and also how I can help you accomplish your own real estate investment goals!