Newbie in Fear, Needs Help!

16 Replies

Looking for some advice... I am in my due diligence on my first rental property. It seems like a good baby step to start with as I gain more hands on experience. I live in south Georgia and the prices seem to be great for someone like me starting out. 

So here the stats. Its a single family (3/2 1300 sq. ft) built in 1958. Its was previous base housing but the base closed in 1974 and now its a neighborhood. The bones seems to be in good condition, brick on a slab with new roof and HVAC, while the inside is a little rougher but mostly dated. It has a tenant for 4 years that has paid on time each month and the reason the owner is selling is to invest in other properties. Cash flows roughly $200 per month and that's being conservative. 

So after touring this home a few hours ago I started to panic on the inside. On paper this seems good and a step in the direction I want my life to go but I have this burning fear inside me saying run away and stick to your 9-5. Is this normal and how can you overcome it? Any additional insight would be greatly apprenticed also! 

Hey @Ron Chase West Honestly, if you have ran all the numbers very conservatively and it still cash flows decently, Go for it! I would be sure during an inspection to get an accurate idea of what basic rehabs would cost to make this rent ready if the tenant does indeed move out.

Is the tenants rent current at market level?

If you have all your ducks in a row, and are pretty confident on things, but you are nervous, JUST DO IT

@Kadeem Wells Thanks for the feedback. The water heater looked pretty new but I couldn't tell much about the plumbing. I am meeting with the bank today to go over the loan and appraisal then getting a inspection tomorrow. After looking at some other comps in the area the I could have 5-15k of equity to reinvest somewhere else but we will see. I am in the Albany market right now. 

I don’t know that area, as it’s 2 hours out of Atlanta.

To get a 3/2 that is livable for 17,500 sounds great. Worse comes to worse you will need to put some small work in it for 10-15k and you can up the rent.

I don’t know the area or the house but if you can get a single family for 17.5 that I is livable and getting rent, it sounds like a great starter. 

Feel free to pm me! 

@Ron West

The statement that tenant pays on time is your belief not necessarily a fact unless you’ve viewed the owner’s bank statements over the length of the leases. Owners can and will say ANYTHING to get a sale. Don’t take anything a seller says as truth. Do the deal based on the available tenant pool to replace the current tenant because you ‘assume’ they DONT PAY on time.

If your numbers still work with all of your other vetting than pull the trigger.

@Ron West ,

It's absolutely scary and nerve wrecking at first.. b/c it's endless possibilities of what could go wrong.. but it's a mindset you need to change.   Whatever comes your way, you'll deal with it, and get past it.     Life happens,  you deal with it!

I guarantee 1000% you will regret not buying it!   I still have a few houses I think about as the ones that got away!   

I  just googled your zip code, looks amazing-- similar to the prices we have here.. why aren't you getting this triplex instead?! 207 N Carroll St, Apartment A, Albany, GA 31705?!

Hi Ron,

No Disrespect but the house is $17,500 what's the worst that can happen. Go for it. Everyone is nervous or fearful on the first deal but at that price your worst case is that you lose $17,500. That's nothing to the scope of things.  Always look at the worst case once you realize its nothing the fear is gone. You still have your health and you have tomorrow to try again. Never forget that. 

@Caleb Heimsoth he says it rents for $450 so I’m thinking he meant $17,500. I’m located in Southwest Missouri and our banks will do small loans like that, usually in-house or commercial/construction loan stuff. I’d agree that would likely not be a good secondary market loan candidate.

@Linda S.  

Thanks for that. My nerves probably have clouded my mindset. I am moving forward with the purchase. Appraisal came back great! I am just working some HVAC repairs into the deal now. Hopefully I will know more today and I will be able to lock in the deal. As far as 207 N Carroll St, we have several small multifamily in the area. The issue I see, just from knowing the area, is the ARV isn't the best in that area which makes me hesitate. I will definitely dig more into that property though. Thank you for taking the time to share that with me!

Just wanted to update everyone. I just closed and am very happy with the decision. The seller was willing to pay 2/3 of the HVAC price so final loan was $18,550 with a tenant already occupying and paying $450 per month. I have decided to manage the property myself and after talking to the seller at closing, he stated she has been a great tenant and seems super happy to have a working air conditioner. Thank yall for the help and I really think I would have talked myself out if it wasn't for the encouragement. Time for another!