By Mel Dorman, February 19, 2021
Many of us picked up hobbies since Covid 19 started. Some of us took up knitting or growing our own vegetables. Others started reading or watching all the seasons of Friend’s on Netflix. Cristina decided to use her downtime to learn about real estate investing. Like many new investors, Cristina jumped on Bigger Pockets and started learning the mechanics. It didn’t take long for her to stumble across my profile, as a local investor to learn from.
We connected over zoom and she was already pre-approved. We ran a search and found only 3 properties in her budget. Once we ran the numbers, we saw the clear winner. The only issue was there wasn’t a vacant unit for Cristina to move into, which was a requirement for her loan. I called the agent and discussed the idea of the owner paying the tenant “cash for keys” to voluntarily break their lease. After a week of back and forth negotiations, the tenant agreed and we all were in contract!
If there was a vacant unit to start, this property could easily have been a bidding war. Portland has a strong seller’s market at the moment and owner occupied duplexes are in high demand. Fortunately, by asking the questions that other’s didn’t think to ask, we were able to put together a win win deal for everyone.
Still, buying your first investment property comes with a lot of challenges. Nothing is every simple in a transaction and first time buying fears are real. The inspection uncovered a few challenges which we were able to negotiate repairs for prior to closing. Plus the seller agreed to provide $8k in closing costs, a $5,000 price reduction, and paid the tenant $3,000 to vacate. At the end of the transaction, it was clear we did really well compared to the other sales in the area.
A year ago, Cristina never imagined she would be an investor and today, her bravery paid off. With this purchase, she is well on her way to building wealth for her future. Her monthly cost of living dropped dramatically and each year she will be gaining about $22-$30,000 of appreciation each year and another $9,000 in principal pay down. It’s only a matter of time until she will be ready for the next one!
Mel Dorman
Broker | OR & WA
She/They
Ten years ago, Melissa was living in a slum in Kolkata, India, helping over 200 women escape sex trafficking by providing alternative work at a social business...
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- melissa@livingroomre.com
