Let’s Talk Real Estate: My First Real Estate Deal

Disclaimer: My first real estate deal was unique. The opportunities presented to me are a privilege and may not be available to everyone out there. However, this should not discourage you from ever getting into real estate investing. There are so many ways to get into real estate investing with little money. You just have to think outside the box and more. Our minds are powerful and you can only imagine the things you can think of when you really want something.

Before we begin, buying a home is not a sit-back and relax process, this will require organization on your part as the buyer and can take a toll on your emotional/mental health. Buying a home is stressful, scary and wonderful all at the same time. BE PREPARED FOR ANYTHING AND TREAT YOURSELF WHEN SOMETHING GETS DONE, EVEN THE LITTLEST THINGS!

My first real estate deal was filled with so much emotions. I did not expect getting a property as quickly as I did, but I prepared for anything to happen. Before diving into this experience, here are important details on the home:

Selling price $450,000:

  • Unit #1 – 2 bedrooms/1 bathroom (approx. 850 sq ft.)
  • Unit #2 – 1 bedroom/ 1 bathroom  (approx. 450 sq ft.)

The home included a basement that was fully renovated with a full bathroom and was connected to Unit #1 and had hook-ups for a washing machine and dryer. The home had parking, separate utilities and massive amounts of space for the home sits on a 5,000 sq ft. lot. The home is in a good town and neighborhood as well. These checked off all the boxes for my significant other and me on where we wanted to live. Eventually our only sacrifices were space (we’re still adjusting) and the lack of a washer/dryer (we’re already looking into a washer/dryer combo to replace the dishwasher LOL). Another important detail is how we have financed the deal.


We used funds from my parents Home Equity Line of Credit (HELOC) to finance the down payment. In short, a HELOC is a line of credit, like a credit card, that is opened at a bank using a percentage of your home’s value as the credit line. So for example, if you have a home valued at $600,000 and it is fully paid off, you can open a line of credit and a bank will give you access to up to 75% of the home’s value. That’s $450,000 you have access to! Note, your home does not have to be fully paid off to open a HELOC. 

After lengthy discussion and analysis with my dad, we decided our main goal was to focus on getting that first property and maximizing cash flow. The original plan was to go the FHA loan route (3.5% down payment), but we decided it was best to go 20% down using the HELOC funds. This all may sound like a lot and I can easily get into the flow of talking loans and ways to fund your deals, but let’s focus on this first deal! Also, having a HELOC is a huge advantage which I am fortunate my parents have access to. Going to your parents and having them fund your down payment when you are trying to get your first investment property isn’t the easiest thing to do, but when you set aside your pride and look at the bigger picture, it’s one of your biggest tools to building wealth. I spent a lot of time trying my best not to involve my parents funds out of pride. However, my dad and analyzing numbers on Microsoft Excel convinced me that using the HELOC would save us so much money over time. Even then just remember, they’re getting paid back once I open up my own HELOC + interest! This isn’t a free ride! It’s called utilizing leverage (we’ll talk leverage in the future). 

Let’s get started on how my first real estate deal went down!

Me, my significant other, parents and agent were on week 6-7 of our weekly tour of properties. I originally had an off-market deal in place for a 2-family home, however the seller got cold feet and decided to back out. I was stressed and upset because we were ready to go into the next stages of the home buying process. Me and my significant other would often send each other different properties that hit the market on Zillow.com, Realtor.com, Trulia.com, etc. One of the links she sent me was to a fully renovated 2 family home. I contacted my agent and sent him the home; there was an open house that coming weekend and we added that to our list of homes for the day to tour. The home was our last stop of the day after seeing 2 other homes. We immediately fell in love with the place. Both units were fully renovated and we loved the area. After going through the open house and consulting with my significant other, parents and agent, we decided to put an offer the same day. Your real estate agent does all the communication with the seller’s agent and you are kept up to date by your agent. When putting an offer down, all that is required of you is the price we want to offer and your signature! 24 hours later, we got our offer accepted!! We offered the asking price of $450,000, which we believed would be our best shot at getting the home. So much excitement went through my mind when my agent texted me the good news, but at the same time, I was starting to get nervous as the real work was about to begin. 

Officially “Under Contract”! 

Attorney Review – First off, when choosing an attorney, in my opinion, work with an attorney that is experienced and is compatible with your work style. I am a technology oriented millennial and when my agent referred attorney’s (you can use your agent’s referrals or find your own), I had the option of choosing an attorney that is tech savvy vs. a more old school attorney. Personally, I went with the attorney who was a little less experienced, but would fit my style of work. The attorney review is a three-day period after an offer is accepted where the contract of sale for a home is reviewed and dulled down by the attorney to present to their client. The buyer’s attorney notes any revisions that would need to be made to the contract and would present them to the seller’s attorney. Revisions that need to be made would make the contract equal and satisfactory for both parties. After the three-day period, more signatures are required (FYI, this is only the beginning!).

Inspection – The bread and butter of the home buying process!! In the state of New Jersey, prospective buyers have a 10-15 day window to hire a professional home inspector to give an in depth analysis on the condition of the home. During our inspection, our inspection documented and photographed the smallest of details. From loose wires on electrical to small cracks on tile, our inspector noted EVERYTHING. Our biggest hiccup was the basement shower. When the shower is turned on, water leaked to the outside of the bathroom shower and onto the basement floor (big yikes!!). We received a $1,500 credit due to the issue and had our contractor redo the shower for $1,300 (labor and materials). $200 savings!! We also hired a professional to conduct an oil tank sweep on the property. Heating oil tanks were primarily used in older homes and have slowly become phased out of real estate. Spending a small sum is worth the peace of mind, because removing an oil tank can cost you thousands!! 

Financing – At the same time when attorney review and inspections are being done, you as the buyer are working with your lender! Your lender will begin gathering all the information needed to send to the underwriter, the big bad person that approves your loan! (just kidding, if you are organized and on point with all your documents, you will never hear from underwriting). Here are a list of things you’d probably need to give to your lender:

  • Copy of driver’s license/state issued ID
  • IRS Tax Returns from the previous 2 years
  • W-2 Form from your employer from the previous 2 years
  • Bank Statements 

If you are planning on taking out a mortgage for your home purchase, having sufficient cash reserves of at least 3 months are commonly required by lenders. (This may be a good time to read Get Your Money Right! An Introduction to Tracking Your Finances to see how you can get that cash reserve!). Your lender will give you the interest rate, potential closing costs, and monthly payment on the loan including monthly taxes and insurance. Interest rates on loans are important, if you are getting a fixed rate, the lower your interest rate is, the lower you’ll be paying over time! You will also need home owners insurance! Be sure to shop around. I used one of my agents referrals from State Farm.


Lenders will also need to conduct an appraisal on the home. Appraisals can be a scary time, because this is a way for the lender to say, “this house isn’t worth $450,000, it’s worth $400,000, you will need to come up with the difference or we will not give you the loan!” This was another make or break moment in the buying process. Fortunately for me, our appraisal came in right @ $450,000! 

SMALL TIP #1: I scheduled my home inspection, oil tank sweep and appraisal all on the same day! Yes this can be done! I also worked remotely on my laptop and did not take off from work, but that’s because I like to appreciate my vacation hours while I am still working my W-2 job.

SMALL TIP #2: I keep all my files organized on google drive, whenever a document was needed to be emailed, I easily had access to it.

Loan Approval – The moment of truth! The answer from underwriting! Once you’ve submitted all your documents to your lender, your loan application is moved over to underwriting for review. Underwriters track every dollar you earned to make sure it is legitimate and that there isn’t anything fishy going on! I mean remember, the lender is making an investment in you, wouldn’t you want to know everything before you make an investment? Our loan was approved with flying colors and we were ready for closing!

Final Walk-through and Closing – Please note, do not make this mistake that I did. Right at the start of closing, my attorney asked me when was the last time I saw the house in person. I said 10 days ago. She paused and said I don’t feel comfortable closing today if you don’t see the house for a final walk-through. I did not feel the need for a walk-through within that 10 day span and I also went on vacation before closing (which was very enjoyable before buying this house!). However, it was getting really cold at the time and my attorney feared for any damage to the pipes since the temperature was going under 32 degrees. She did not want me to start off with a huge problem after closing. My agent drove me and him to the house and did one final walk-through before driving back to the attorney’s office. Everything was good to go and we got that peace of mind! The closing process takes about 1 hour and involves a lot of signatures! Make sure you have a simple or consistent signature, because half way through, I didn’t even know what I was writing! My attorney explained every document I signed and as we got to the last signature, congratulated me and handed me over the keys to my new 2-family home! 

The entire process from placing the offer to closing the deal on the home took a little more than one full month. As I mentioned in the beginning, buying a home is stressful and emotional. Nothing is official until the papers are signed and you are handed over the keys at closing. In my opinion, avoid talking or letting people know about being under contract on a home. Anything can happen from the second an offer is accepted to the day of closing. The toughest part of the process is the beginning. Searching for that right property, offering on them, getting rejected is a cycle that will keep on repeating until you get your offer accepted. After you get that offer accepted, everything will go by so fast and it’s important not to lose yourself in that process. I could not have done it without the support of my parents, significant other and my real estate team! 



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