Life is all about mindset. People tend to put themselves in categories of things they can and cannot do. Growing up, I was a pro at this and I do not know why. No one told me I could not achieve certain things. I just did not believe thatI could.
Reflecting back on the purchase of our first rental property, we took a big leap. At the time, we recently moved to a new state having no network outside of the military. I was back in school for my engineering masters and Robert was across the world in Japan protecting our country. Maybe we were crazy, or just crazy enough to make it work.
When a good real estate deal is purchased, the outcomes are limitless. Our first rental property sat vacant a total of zero days! The downside to the single family space is vacancy. Landlords are one failure point away from having to pay the mortgage themselves, yet the modest single family home was the only way forward for us. To grow, we had to create a process.
I CAN DO ANYTHING
Our first challenge was financing. With limited resources, we decided to repurpose our money tied up insecurities and allocate it towards this project. Fortunately we had good credit, so conventional financing was available at 4.5% interest and 25% down. After calculating the numbers, our monthly payment was around $1,600. As long as we had a plan to rent the space for more than $1,600/mo (plus all monthly expenses), this property was ours. When creating our proforma, or projection for how the property will perform, we trend conservative. We projected to rent the house for $1,750/mo. The bank completed their underwriting and approved our purchase. We were now owners of a rental property and after a substantial renovation, the home rented for$2,195/mo.
Purchasing that little single family home was all it took to start my mindset shift, and now I believe I can do just about anything.
