The Rise And Fall Of The First Asset
#EntrepreneurOfTheWeekOhadSolan | Post 2
The Rise and Fall of Our First Property Investment
My partner and I began working together—morning studies and meetings, afternoons working with clients in the U.S. We decided to invest in Jacksonville, Florida. People were fed up with living in cold, expensive, crowded states and were looking to move somewhere more affordable and warmer, and Jacksonville seemed like the perfect solution.
We sent out offers to purchase properties almost every day, but each time the answer was negative. We realized we needed to be on the ground to change things, so we decided to fly to Jacksonville.
What followed was an intense month where we went to see properties every day with our team. As the days passed, we felt we were getting closer and closer to our first deal.
The property on Lambert Street wasn’t large—it had three bedrooms, one bathroom, and a storage room. We saw potential: we could add another bathroom, and we decided to convert the storage room into a separate unit with a bedroom and bathroom. The renovation estimate from the contractor worked for us, and within 15 minutes of arriving at the property, we agreed to pay the asking price. Later that day, we received a positive response.
Here are the numbers for the deal:
Purchase Price: $78.5k
Renovation: $60
Estimated After Repair Value (ARV): $190k
Rent: $1,350 + $650
The appraiser pleasantly surprised us with an ARV of $208k. That’s right—a perfect BRRRR. Everything we’d studied and prepared for led to this moment.
But despite the contingencies we had accounted for, there were still things we hadn’t anticipated.
About a month after we returned, war broke out. I was called up for reserve duty, and my partner worked in command centers. Our focus was lost, and the contractor took advantage of that, adding extra work while we were away. After a few days, we sent our agent to check on the property, and he was shocked. It looked as though work had only just begun.
We got ourselves back on track, and the next day we sent a new contractor to the property. We received regular updates from him until the work was completed.
In the end, the renovation took two months longer than expected. Due to the many mistakes the first contractor made, we decided to sell the property with a minimal profit. Fortunately, by increasing the property’s size, we actually bought it much below market value, so despite all the challenges we faced, we didn’t end up losing money.
We learned a lot from the experience, and those lessons helped us with the purchase of several more properties in the city.
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