Live and Flips: 5th Ave


BEFORE & AFTER

PROPERTY NARRATIVE

This was the first house that I ever bought, and was also my residence. It was the first of what would eventually be 16 total real estate investments. It needed work, but not a ton. We did mechanical, cosmetic and landscaping improvements and turned a 1/2 bath into a 3/4 bath…spending about 50K.

This house not only earned me a CAGR of 12.35% over the 10.5 years that I owned it (on the 40K of out-of-pocket funds invested), but it did so much more. Here are a few examples of how it helped me…

-I was able to refi cash out of the house to pay off student loan and credit card debt…thereby converting all that interest into a tax deduction. Extra funds captured were used to do improvements as well.

-I also used refi’d equity to invest in starting a business with my partners…which luckily became quite successful.

-I was able to give a third lien position on this house, to help secure another private loan for a commercial property investment, for our business…saving the deal and us quite a bit of money.

-My wife (then girlfriend) and I enjoyed living in the house the whole time, even while it went under water during the financial crisis. That really had no effect on us at all. (thx 30yr fixed loan).

-10 years after purchase, and post crisis, we sold it for 180K more than we bought it for. With those profits and the principal pay-down we had amassed, we were able to trade up to a better home for our needs, in a nicer neighborhood with better schools…all tax free. 

All this happened because we simply took the money we would have absolutely had to pay in rent anyway, and turned it into an investment.

It always concerns me when I hear people, that have large audiences, telling that audience not to buy a house. Our country incentives you so greatly to own your residence, its very worth it. 

I wrote this article on the topic…..
Renting vs Owning: Why You Need to Own the Real Estate You Live In (of Which You Will Be the World’s Best Renter!)

And in case you are wondering…yes…I have factored in every last expense, all interest, and all closing costs at purchase and sale, when calculating that return above (I don’t take gimmes when it comes to money).

PROPERTY FINANCIALS

(This property has been sold)