The Real Estate Deal That Changed My Life
The picture shown above was my first deal.
At the time I was really motivated to start investing in real estate. With this deal specifically, I was interested in the idea of “house hacking”… Or in other words, renting out part of your house to roommates so that your living expenses are paid for you.
I was digging on the MLS one night when I stumbled across this 5-bedroom property located in Indianapolis. Typically 5-bedroom homes range from 2,500 to 5,000 square feet, but this one came in at 1,800 because an investor before me had converted the basement into 2 additional bedrooms.
That meant more value packed into a smaller space… Even better.
I bought the house for $194,000 with a loan amount of $184,300. The interest rate was locked in at 4%, putting the total mortgage payment at $1206 every month. After that, I rented out 3 of the rooms at $550 each, while I lived in the 4th. And just like that, I had my first investment property.
I wanted to pinch myself. Not only did I reduce my living expenses to $0, but I was actually getting paid every month from the property. Aside from that, this deal was proof in the pudding.
Proof that financial success in real estate was possible.
Proof that I could generate passive income to build wealth for myself.
Proof that I could escape the “rat race” that everyone talks about… and the list goes on.
Fast forward to today and the numbers look even better. The payment did go up to $1600 after I moved out and lost the Homestead Exemption (tax rate went from 1% to 2%).
But the value is now sitting at $330,000, and it’s rented for $2850 a month.
$2,850 - $1,600 = $1,250 a month
Even with random expenses on the property here and there, it cash flows around $1,000 every month. Not bad for one deal!
I hope this story allows you to see what’s possible through real estate investing. I faced a lot of doubt early on before I started, a lot of people told me real estate just wasn’t worth it. And I get it – there are a lot of misconceptions that people have about real estate.
But I didn’t let that stop me, and neither should you.
What kept me going was hearing from people who had done what I was doing and found success.
And maybe that’ll be you someday, guiding aspiring investors to a life of financial independence and generational wealth.
About David Lecko
David Lecko is the CEO of DealMachine. DealMachine helps real estate investors get more deals for less money with software for lead generation, lead filtering and targeting, marketing and outreach, and acquisitions and dispositions.