What are the hidden expenses you never hear of?

[David Grimm]

Hi!

I've been doing a ton of research over the last few months and feel like I've got a pretty good handle on the expenses. Every once in a while though, I hear on the podcast some unforeseen expense that an investor ran in to or some fee they had to pay for something illegal they did on accident.

I am aware of the obvious things: mortgage, repairs, taxes, utilities, insurance, mortgage insurance, and turnover costs, but what are some of the less known expenses?

What are a some surprise expense you've ran into? How much did they cost? Were they one-time or recurring? Were you able to still cash-flow with them? Was it worth it in the end? How (if at all) could you have prevented that having to pay them? All the information you can give me is helpful in my preperation!

If it helps, I'm planning to invest in the Maryland (MD) / Washington DC area. I'm looking at both buy and hold rental strategies as well as house flipping and maybe even wholesaling (once I get some more experience).

Thank you all so much for your help, I couldn't do this without you!

[Jill DeWit]

Hi @David Grimm

First thing to consider is how you are going to "reach" potential sellers in the area you have targeted. The BEST way is to pay for accurate, current data from a company like CoreLogic/RealQuest and send out mailers. 

The beauty with this data is you can request a very specific type of property and get a report in minutes! 

For example: I have researched and targeted 5 acre parcel in XYZ County and only want to contact properties zoned: vacant land, residential, recreational, etc. Then I get a list of say 5,000 & I can scrub it down to 3,000 after removing duplicate sellers or whatever. Then I create a standard letter and mail merge all to one great document and send to folks like YellowLetters to mail for me. THEN I have ONLY interested sellers calling ME! 

Costs vary depending on volume, but you get the idea. Certainly better than some folks "driving for dollars" and spending all day canvasing areas to find a handful of boarded up homes to try and contact and motivate those sellers.

Hope this helps!

Jill