Hello and welcome!
John Galloway here, owner of Toprock Real Estate. I bought my first house at 25 out of HUD foreclosure and never looked back. Real Estate has been in my life for generations, since my grandfather and grandmother bought and sold small lakeside cabins in Pennsylvania, through to when I spent my weekends with my Father rehabbing rental real estate for my cousins, sisters, and uncles. It has massive power to transform your life, net worth, and network. So how did I leverage Private Mortgage Insurance (PMI) to make $100,000? Find out below...
In the summer of 2019, I received a lead from a paid search for a condo in Capitol Hill. The owner had bought it out of a short sale in 2008 with the intention to flip it for a profit. They proceeded to demolish the floors, cabinets, kitchen and bathroom sinks, and the light fixtures before realizing that they did not know how to flip property in any way, shape, or form. They ended up living in it for the next 12 or so years before asking me to come take a look. There was a fridge and a microwave, but no lower cabinets or sinks. There were no floors, only subfloor. There were no shower heads in either bathroom. There was a toilet in one bathroom; however, if you wanted to wash your hands, you had to go to the sink in the other bathroom (the only sink in the property). We proceeded to offer $230,000, which he accepted before disappearing for over a year. My marketing service at the time provided read receipts for all emails, and I noticed that he continued to open the emails but would not respond. I started sending emails like this, "Hey, I know you are opening these emails. Want to give me a call, and we can do a deal?" Eventually, he emailed me and said that he wanted to sell his property; however, he needed at least $215,000 to do a deal. We accepted on the spot and, after a week-long bender, he signed the contracts and disclosures.
We rehabbed the unit, and I decided it would be a great place to live. I worked with my partners and put 5% down on the property with an FHA loan in 2021. I didn't have enough to put down more, but I was confident that the PMI was worth it in the short term. Fast forward to April 2023, I've successfully applied to remove PMI from my loan as I've exceeded 78% Loan-to-Value, which means the property is worth much more than I paid for it.
If I had waited to save 20% down to avoid PMI, I would have missed out on a wonderful market opportunity, including $100,000 in property appreciation. In total, the PMI cost me about $6,000. Set up a meeting with me to learn about this and other tricks and tips to make the most out of real estate.
