Post #12 - Nothing [tangible] to Show for It

Investors,

 The past few weeks I have been buried in real estate. Not literally but quite figuratively (I hope I used that word right).  Quick summary:  I got a signed contract for my first property, formed company, & the deal fell through.

I got a call from an owner that had a house for sale with an adjoining studio apartment.  Great neighborhood, great town, renters stacking up to rent it, but they (the owners) wanted to sell.  They own a few rental properties in the area and are slowly liquidating them and purchasing farm ground in the country.  I ran the numbers and decided to view the house.  It was an old house (I didn't realize how old at the time) with stucco on the outside.  From the walk-through, I noted that it needed a refrigerator for the house portion, stucco repaired on the exterior, and a fence on the property line because of a crazy neighbor.  I already had the financing ready and approved.  I got a few quotes on the stucco project and threw some money in for a fence.  It was an old house but I had read forums on BP about old houses and how they could be really charming and a sort of sub-niche.  I thought, "Great.  My first deal and I'm going to be meeting the 2% Rule."  Wrong. 

I had my new lawyer register my new company.  I got a contract from him, negotiated with the seller, we both signed it, then I opened Escrow.  Now it was time for the inspections.  I asked for Radon, CO, Termite, and Home Inspections and I learned a lot from the inspector.  I learned a lot of fundamentals about roofing, flashing, paint, and moisture damage/control.  I also learned that there was a rotten floor joist, termite damage, and (in the attic) bats.  I spent the rest of the week on the phone with contractors, trying to match a cost with every immediate issue.  In the end, I was up-front with the seller and explained that we wouldn't be able to purchase the property because of the repairs.  It was disheartening because I'd put a lot of effort into orchestrating the whole thing and it didn't materialize.

To top it all off, my lawyer had taken a vacation in the middle of the whole transaction but said he'd be checking and communicating with me over email.  I emailed him 3 times (no response) then called his office twice when he was back in town (still no response or callback).  I really wanted more guidance with this first deal and unless something unforeseen happened (God-forbid a tech meltdown, an injury, or worse) I'll be looking for a different lawyer.

Some good things from this event:

• I now have a registered company (Country Mile Properties, LLC)
• I have a great inspector contact
• I have a relationship with the seller (whom has other properties)
• I know more things to look for when viewing a house
• I have a better feel for the process of getting a signed contract, opening escrow, and preparing for closing
• I did a lot of research into property management things like rent collection websites, cost tracking & budgeting systems, and important conditions to put into a lease 
• I have several contractors that I have already made contact with and know their general scope of work
• I know how to fire my lawyer
• I know I can rely on the numbers, stem my emotions, and walk away if needed

No time to cry.  On to the next one.  

Trent