BiggerPockets

i have been doing my research for about 8-10 months and i finally found a good property in a pretty good niegborhood. I am so exited that i finally have started the process of being an investor. i bought the house for $130K it is 4-2.5 3000 sq feet. Avg homes in the area sell at $75 a sq foot so i figured i could get about $215K--$215K for it to get rid of it fast. Right now the budget is at $25K w about $5k in contengcy which after 2 weeks of work so far i think i will have to use due to unforseen costs...but i still think I'm in good shape. Any thoughts?

Congrats on your first property, keep us posted as to how you are doing.

Good luck with the project.

With each deal you will get better at anticipating the unexpected and building in funds to cover the stuff you really can not identify early.

As noted prior, be careful about schedule slips. I remember one project I took on. I was getting a place ready to rent it out. Every day I worked on it cost me $XX per day. It helped me keep in perspective the benefits of doing the work myself (as a 1 man band) vs. the income I was losing.

One other things while I have your attention.

Be careful about the insurance you buy. Some policies will not pay out if they find out that the property was not habitable initially or if the work lasts longer than 30 days. The insurance agent will sell a normal rental policy but what is really needed is a policy for a refurbishment project (the same sort of insurance used when there is a construction site). The logic is there is a higher chance of damage, vandalism or an accident that results in a claim. Hence the premium should be higher. Better to be sure before something happens and you find the insurance company is returning your premium while declining to pay out.

John Corey