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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.