Hey guys, it’s Sharon from digital nomad quest. And this is Sean with everyday Rei and today we’re gonna go over how we purchased our $270,000 home in Dallas, Texas. If you guys are new to this channel welcome I’m all about teaching how to build passive income becomes financially free and design your best life. So if you guys are interested in that, make sure to subscribe and hit the bell button to be notified my latest videos and make sure to subscribe to Sean’s channel where he talks all about real estate investing. So in this episode, I wanted to break down the numbers with our $270,000 home and kind of go over the home buying process. I also wanted to give you guys a little bit of a tour of the place. And lastly talk about how much it’s been to kind of furnish the place and what to expect when you are furnishing and Airbnb essentially, the reason why I say Airbnb is that in the future, we plan to move out and rent this out as an Airbnb after maybe two years or so. So there have been some updates since our last video when we actually talked about the numbers with this home. If you guys have been following along I had mentioned $280,000 as our purchase price. Now it’s actually $270,000 For our purchase price. So let me rewind back and talk about the entire process of buying this property. So we had kind of made that decision that we wanted to purchase a home in Dallas. So I spent maybe a month or two months kind of looking at Dallas homes on Redfin, just checking up on the prices checking up on the area that we wanted to purchase a property in. And essentially we found this home that was really nice, but it went pending really quickly after it got listed. So we’re like, okay, that’s not gonna happen. And then after we were driving back from Los Angeles from a friend’s wedding, we saw that the property was actually back on market. So we thought there was good opportunity here.
We liked the location a lot, we realized that it was centrally located in Dallas, within 10 minutes from pretty much anything that we want to do. I was actually fortunate that we were driving back from Los Angeles because there were no distractions, I was driving the six hour drive and Sharon with on her phone browsing and shopping for a property. So she usually does, she happened to notice that this property that she noticed a few weeks ago was not back on the market at the time, it was actually listed for $277,000, when pending really quickly. And then we noticed it was back in the market, we knew that this was our opportunity to jump because we knew that we do want to buy a property in Texas with next one or two months. So then once we realize that this property is back in the market, we realized that this is the home that could potentially be the one for us was recently renovated in a good location because it’s just on the market. We knew that we had a limited amount of time before someone else would come and snatch it out. So immediately I asked her to do some research on Redfin, if you scroll all the way to the bottom, you can find the listing agents information, actually, I called the listing agent and asked her all the questions about the home. Tell me about it, what kind of work was done, and more importantly, what happened. And why did it fall out of contract, she told me that the buyer didn’t have enough money to close on the deal and financing fell through as a home seller, I understand how frustrating that can be. And I know that in that situation, sellers are more likely to take a reasonable offer from someone that can actually close maybe even more so than someone that has a higher purchase price so we can offer slightly less or give them better terms. And then we can close the deal.
So we actually asked the agent, so what was that previously accepted offer? And she actually told us I don’t know if a lot of agents would have, but she told us it was $290,000, which is what they accepted in the past. You know, she was telling us like a lot of people visited the property a lot of people were making offers and she said it got bid up a lot. We were thinking it would have been a lot higher, actually. So we thought 209,000 Okay, that’s doable. Con was gonna be like, You know what, let’s just offer 290. But then I thought about it. And they actually had financing fall through, they probably wanted some clean offer, ASAP and wanted to close it as quickly as possible. So I thought what if we did $282,000. And then that was like $5,000 More than listing price. So that’s what I
thought process, we figured that if we submit a clean offer with no contingencies, we buy it as is, and we’d offer them that $280,000. So for those of you who don’t know what no contingencies mean, it means that we are buying the property clearly as is if we decide to do an inspection afterwards and something comes out wrong, then we can’t just back out, we will lose our earnest money deposit. So whatever money we put down is already there’s going to pretty much commit to buying the property. Now this listing agent gave us a lot of information, but we still want to be represented. And I’m part of a group called Aria, which is the Asian Real Estate Association of America. And they have chapters all across the United States. And I’ve actually gotten pretty close with the agents here in Dallas. So even though I was in California already had contacts for agents in Dallas, and I called him I said, Hey, Dave, I put an offer on this property, can you represent us and he said, of course. And because we are licensed agents, we do typically get 25% of the Commission for any referrals that we give to other agent. In this case, we are our own referral parties. We refer to ourselves so the agent was kind enough to give us 25% commission of his commission back to us. So once we decided to move forward, he assigned us to one of his agents who gave us a home tour via FaceTime. And that’s pretty cool, because you know, we’re based in California, he’s in Texas, and he’s able to FaceTime us and show us around the property while walking around and giving us his comments on what the property condition was like. And the cool thing is all this was set up within that six hour window for us driving from Los Angeles back to the Bay Area. So
when the agent was giving that little tour on FaceTime, he did mention like there were some things that were not done very well. We were just kind of like oh, it’s probably okay, it looks pretty well renovated from you know the blur The camera that we saw, right, so we’re like, alright, let’s just put an offer. And ultimately we decided to put in an offer at $280,000. We wanted to negotiate, we had some wiggle room,
let’s make the pressure high on the seller, he told them that our offer is only good for one business day. And because we knew that he had so many people looking into properties, he figured that if we can get the property locked up on a contract right now, everyone else would just go away. And then they would stop putting in more offers. And
as previously mentioned, this was a non contingent offer. So we thought that the seller would be more inclined to go with us. So they did accept this is a part that we told you guys about, but then there was more that came afterwards. So we
were actually surprised that they didn’t negotiate with us, they just said 280,000. Okay, sounds good. So right away, we started our paperwork, I have a lender contact friend that we respect the loan process with him. Since we understand that conventional financing is limited, we can only have 10 per person, I decided to get the loan on my own personal name, even though both of us were owners on it. So I was the one getting all the docs and saying to my friend, now at the same time, we’re doing an appraisal for the property. And that’s how the lenders know how much a property is, quote unquote worth. Now the loan type that we got was pretty interesting, because the purchase price is relatively low it qualifies for conventional financing. And conventional financing has a lot of programs, and one of them is a low downpayment program, which is where you only put down 5% of the loan amount, and then you financed 95%. Now there are some downsides to this type of loan, we do pay PMI or private mortgage insurance every month, which is an additional fee, because we are putting in less than 20% of our downpayment. But being able to buy a property for 5% down is very powerful, especially if the purchase price is really low. So for us buying this property was really not that hard to purchase. We had the funds in our accounts already.
But three weeks later, we found out the appraisal came in a lot lower it came in at $255,000. Obviously there’s gonna be a lot of worries around this, like why is it appraised so low? Do we get a bad deal, that’s what we’re really worried about. But to me, like I had been monitoring the market for a while. And I felt like this was actually a pretty good deal. Current day right now I do feel like it was a good deal. As I’m not seeing anything at that price. It’s like over $300,000 for a four bedroom our area and surrounding I don’t see anything this cheap, right anyway, going back to it. If it appraised at $255,000. That means the 95% loan that we would get would actually be based off of $255,000. That means we would have to pay the difference between 280 and $255,000. That’s an extra $25,000 We’d have to pay out of pocket. All of this didn’t make us feel as good, right? So we decided how about we try to renegotiate with the agent again spoke with our agent who actually spoke with their agent, and he was actually able to get it down to $270,000. So that alleviated a lot of our worries, because we’re really thinking like, should we even buy this should we actually pull out of our offer, we would have lost the earnest money deposit if we did so. But it wasn’t like huge of an amount that we would have felt that bad about it. But at the same time, I actually really liked the property, I thought it was really pretty inside. So I did want to get it. So when we renegotiated and got it down to 270,000, both of us felt a lot more comfortable with going forward with this property. So with the lower appraisal, we got a loan for $242,250, which was 95% of the appraised value, and then we paid the $15,000 difference as well as put the 5% down payment. Hey guys, we are at our Dallas home. So I want to show you guys around. So we start off here in the living room like a lot of this furnitures like pretty affordable because we are planning to Airbnb it out this place in the future. So we got some place decorate things like that you got the TV here in the stand. As you can see in the back, it’s very empty, cuz we have not gone a lot of artwork to fill up the place. So if you want to check it out here, probably gonna put some artwork up here, and maybe a rug or something like that, put some more plants I think plants make the place look bigger. I really like the kitchen because the kitchens a lot more spacious, especially compared to our previous place. So now like we have way more room to cook. If we do that we don’t do it that much. But yes, I think this kitchen is like the focal point. I feel like because a lot of people have complimented this area. But let’s move on to this reading neck. So as you can see here, I just kind of set up an area where we can like read and write and stuff like that. And it’s like this distraction free area so that we can do some good work here. Except lately, Dallas has been really cold. So we have been kind of avoiding this place because it’s like really close to this window and it gets a lot colder here. So let’s go actually into the office space. So this is the YouTube studio, as you guys have already seen. So we try to decorate it. So yeah, it has kind of stuff in the back to make it like a pretty setup. We have closet space here where like Shawn switches out his clothes for his tic TOCs and stuff like that. But yeah, so this is basically our YouTube studio. Let’s move over there. This is our office space in the past basically the office and the YouTube studio are combined into one room but now we’d like switch it up. So there’s two different rooms and I feel like that’s been more productive for us. So we got like his space here, my space here closet space there too. So this is bedroom two bath so as you can see here, there’s a bathroom here. And then there’s this guest room on this side so it’s empty right now right so every room has a little closet space we just put been putting our like, you know tools here or like Sean’s handiwork laundry space here as you can see stackable washer dryer. Let’s go to the bedroom. This is the master okay, this we actually have two comforters so it looks all like lopsided right now. But it’s because I sleep better when there’s two comforters and then got the walk in closet and then the bathroom here. So that essentially sums up our place to call outside to show you guys backyard space, but you have a decently sized backyard. So I hope you guys enjoyed this little tour of our Dallas
home. Okay, guys, my memory card ran out of storage. So I’m actually gonna finish this video myself. So let’s go over the new numbers with the home so the new loan amount was $242,250 It was 3% interest and the closing costs were $7,238.66. The monthly principal and interest was $1,021.34. The PMI was $46.43. And for escrow payments we paid $352.28 for property tax and homeowners insurance which goes a total of $1,420.05 per month for our monthly expenses. Now this is lower than what I reported in a previous video because of the lower purchase price and the lower loan amount and out of pocket including the $15,000 difference the 5% down payment as well as the closing costs we paid about $35,000 out of pocket and if you guys haven’t seen in our previous video I mentioned that we have a home in the bay area that we’re Airbnb out and that income from the Airbnb is making up for our mortgage in the bay area as well as the mortgage of our Dallas home and now that our monthly expenses are a little bit lower that means our Airbnb is going to cashflow even more. So now that we’ve been settled into our home for a few weeks, we actually drove from Bay Area to Dallas and then we started furnishing the home so I wanted to kind of talk about the costs of furnishing a home and the reason why I wanted to go over it you know we are possibly going to Airbnb this place out after we you know move out in two years, we’re not going to be in this home permanently, which is why we didn’t buy furniture that was like super luxurious or expensive. We’re kind of buying furniture that was nice enough for an Airbnb. So we spent about $2,800 on appliances, which include the fridge as well as the laundry machines. So the stove and the microwave were already included in this home purchase. And then I also spreadsheet it out a lot of our expenses including like our sofa, our TV, our bookshelves, our plants, chairs, tables, different artwork, window, curtain, studio, desk, coffee tables, all these other things, right, it costs about $3,979.43. Now we decided to splurge a little bit more on our bed because we wanted to make sure we had comfortable night’s rest, like I get insomnia a lot. So it’s important for me to have a nice bed. So we probably spent about $2,500 for our bed we got a nice mattress, we bought comforters from parachute. And we got you know, two separate ones because I wanted my own comforter makes it nicer for me to sleep in. And then we got the sheets and the pillows and everything like that. So he spent about $2,500 for all that. So now tallying everything up for the bed for the appliances. For all the miscellaneous items, we spent about $9,300 furnishing this place. Now this doesn’t include our guest bedroom because we haven’t furnished that yet. And I’m sure there will be other miscellaneous items that we’re going to buy along the way. But if you guys are wondering about furnishing an air b&b, that’s four bedroom two bath probably going to be looking at over $10,000 of spending especially because I’m not including like beds in these different rooms. Like we converted this into a YouTube studio, which I did document the prices around here. I did document the prices of the desks for our office space. But most likely if you have an Airbnb, you’re probably going to make each of these rooms into bedrooms and have beds in each of them. So it’s definitely going to be pricier so I would budget like 10 to $15,000 if you are kind of furnishing an Airbnb, that’s four bedrooms, it really will depend on how big your space is and what kind of Airbnb you’re going to furnish though obviously. I hope you guys enjoyed this episode on how we purchased our $270,000 home in Dallas, Texas. Hope you guys enjoyed kind of the walk through the numbers the numbers of furnishing the place if you guys liked this episode, make sure to smash the like button let me know in the comments below what you guys think of this home subscribe hit the bell button to be notified on my latest videos. And make sure to subscribe to Sean’s channel as well. He talks all about real estate investing, and I’ll see you guys in the next one.Transcribed by https://otter.ai