My First Rental Property Freak Out

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My First Rental Property Freak Out

Justin JohnsonPro Member
Fort Smith, AR · Member since 2018 · 122 posts · 70 votes

Is it normal to start freaking out after you purchase your first rental property?  I know I am seriously freaking out.  I hope that it's just the jitters from all of the new things going on.  This is the first property I've ever bought, let alone a rental property.  My first experience was...interesting to say the least.  The seller seemed a little shady and didn't bother to tell either agent that the tenant was moving out...the same day that we were closing.  I am house hacking this one, living in the one side that I thought was going to be vacant.  The other side was cleaned decently and is in pretty decent shape, but the SMELL is so bad in there.  Everything has been chaotic and I'm really trying to calm myself, but I just have this huge anxiety.  I worked and saved and cut my finances to the bone saving off 40% of my income each paycheck, then poof, it was gone into the down payment.  Has anyone else felt this way when they started or is it just me?

Any stories, advice, or words of encouragement would be greatly appreciated right now while I'm trying to hold it together.

Thanks!

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Joe P.
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
6y

Justin -- relax. It's normal. You didn't buy a 100k car which loses 20% of its value driving it off the lot. You bought a property that likely has the same value it did yesterday. If you sold it tomorrow, all you'd lose is your closing costs front/back, a super expensive lesson but ultimately most of your money is still there.

Now, the purchase is done, but I assume you ran your numbers on this? Why not share it with us and we can provide feedback on your evaluation and what to expect.

What's the smell on the other unit? Is it smoke, dead rat, urine? There's companies that fix everything. 

What's your estimate on rehabbing one or both units? Do you have that cash set aside and ready to go? If so, just start executing. Fix whatever is broken, replace what's needed, do it quickly, validate the work, and work on getting your income rolling.

This is an operations and execution business. You just executed the sale. Not start operating the business. What goal needs to be met with this tenant moved out? Providing a clean, safe, and ready rental to your next tenant. Make a checklist, start delegating items to yourself, a GC, or a PM, and focus on one, two, or three of the biggest items until your checklist is down to zero.

Breathe.

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  • Chris Purcell
    Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
    6y

    Your numbers look good bro relax

    0Reply
  • Damon Gainey
    Knoxville, TN · Member since 2020 · 13 posts · 0 votes
    6y

    @Justin Johnson I am no expert but I would say it is normal. Work your plan and you will be good. Best of luck!

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    Originally posted by @Justin Johnson:

    Is it normal to start freaking out after you purchase your first rental property?  I know I am seriously freaking out.  I hope that it's just the jitters from all of the new things going on.  This is the first property I've ever bought, let alone a rental property.  My first experience was...interesting to say the least.  The seller seemed a little shady and didn't bother to tell either agent that the tenant was moving out...the same day that we were closing.  I am house hacking this one, living in the one side that I thought was going to be vacant.  The other side was cleaned decently and is in pretty decent shape, but the SMELL is so bad in there.  Everything has been chaotic and I'm really trying to calm myself, but I just have this huge anxiety.  I worked and saved and cut my finances to the bone saving off 40% of my income each paycheck, then poof, it was gone into the down payment.  Has anyone else felt this way when they started or is it just me?

    Any stories, advice, or words of encouragement would be greatly appreciated right now while I'm trying to hold it together.

    Thanks!

    Enjoy this feeling! You will get less and less of the buyer's remorse feeling with each property you purchase. I am on #6 here in Columbus and I do not really get that feeling anymore 

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    1Reply
  • Kim A.
    Toronto · Member since 2020 · 1 post · 1 vote
    6y

    @Justin Johnson

    I feel you! I’m in the process of closing on my first rental as well and I literally (and randomly) threw up when i found out my offer was accepted lol. I think i was overwhelmed thinking about how much money would be leaving my bank account all at once lol.

    But ultimately it’s a great choice to invest in properly and you will see the benefits sooner rather than later .

    CONGRATS TO YOU!!

    1Reply
  • Joe P.
    Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    6y

    I came back to this thread since its blowing up my notifications (haha); @Justin Johnson what was the source of the smell? Are the numbers you provided ($1400 per month rent) based on both units being rented or just one?

    Either way, make your checklist, start tackling items one at a time. Hire out what you need to. But the point is to close the gap between present state and rental state as quickly as possible.

    0Reply
  • Justin JohnsonPro Member
    OP
    Fort Smith, AR · Member since 2018 · 122 posts · 70 votes
    6y

    @Joe P. the numbers are for both sides being rented out. The smell appears to be from the inside pet bathroom in the corner of the living room/dining area. I think they had the kitty litterbox there and the cats would miss the box. As I was masking off the floors to start painting, I got hit in the face with with overwhelming ammonia smell from that corner. I put killz all over the walls, will probably end up replacing the trim boards, and drowning the corner in some kind of enzyme eliminating solution. Painting should be done later today/tonight yay!

    0Reply
  • Brian Ellis
    Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    You have positive cash flow with one unit rented out. You’re in good shape. Don’t worry about the smell, everything is replaceable. Everything can be fixed.

    My first property, I remember freaking out after noticing half my houses sill plate was eaten by carpenter ants. The best thing I could’ve heard was from the terminix guy himself... he said “good thing it’s just wood”. All I did was find a way to replace it, it wasn’t that difficult. 


    1Reply
  • Aqil Dharamsey
    Rental Property Investor · Rochester, NY · Member since 2016 · 303 posts · 154 votes
    6y

    @Justin Johnson

    Relax buddy this is normal and to be honest it was a blessing that the tenant moved out instead of you have to chase them out later on. You are on your way to becoming financial free in the coming years. Just stay focus and push through. Reach out for support. BP is full of really great members and overly eager to help out. GOOD LUCK!

    0Reply
  • Joe P.
    Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    6y
    Originally posted by @Justin Johnson:

    @Joe P. the numbers are for both sides being rented out. The smell appears to be from the inside pet bathroom in the corner of the living room/dining area. I think they had the kitty litterbox there and the cats would miss the box. As I was masking off the floors to start painting, I got hit in the face with with overwhelming ammonia smell from that corner. I put killz all over the walls, will probably end up replacing the trim boards, and drowning the corner in some kind of enzyme eliminating solution. Painting should be done later today/tonight yay!

    Awesome - hold off on paint until you've confirmed the odor is GONE. Give it a few days even because it can come back. I have two cats and one was very territorial to start, so I know exactly what you're dealing with. They typically spray right along where the drywall meets the trim. DEFINITELY replace that trim if you can. If you need to, cut sections off of the drywall and replace it. When the drywall comes off you should see if you need any spray behind that...could also turn the insulation different colors. Better to spend the time/money NOW and fix that completely. If you move in a tenant and they have even a whiff of that (usually it happens after they move in) they're going to be pissed from the start and give you a hard time. I would also not rent to anyone with cats on your first set of tenants because those cats will pick up right where the last one's left off, negating all of the good work you're doing.

    0Reply
  • Nadir M.
    Property Manager · Westminster, CO · Member since 2018 · 486 posts · 110 votes
    6y

    @Justin Johnson

    In the contract there should have been a clause protecting you from this: basically stating that the condition of the property has to be the same as when you saw it originally and that all details need to be released to purchaser and that the seller will allow purchaser to walk through property within 2 days before closing to make sure they abide the Purchase Agreement. I feel like the tenant leaving at closing should have been discussed with you prior to closing.

    0Reply
  • Shawn Pottschmidt
    Rental Property Investor · South Bend, IN · Member since 2016 · 73 posts · 29 votes
    6y

    @Justin Johnson American Express has a card that earns cash back and you only pay interest for 15 mo. I used it on a BRRRR recently. Sort of nice keeping everything on one card to keep track of expenses. Just an option for you.

    0Reply
  • Antonio CuccinielloPro Member
    Investor · Austin, TX · Member since 2016 · 531 posts · 310 votes
    6y

    @Justin Johnson I was scared just as well. Well, scared and excited that I started down the path of financial freedom. As long as you did your math right, were conservative with your numbers, then you have done everything you can to mitigate your risk.  That's all you can do.  Everything else you can't control and must learn to let go!

    732-402-6988
    0Reply
  • Ryan Howell
    Rental Property Investor · Hendersonville, NC · Member since 2016 · 446 posts · 412 votes
    6y

    I was terrified of my first deal.  I had shady tenants, found out I had a failing septic system, neighbors calling and complaining.  I spent my vacation fixing up the vacant unit....now the property is hooked on the sewer, has good tenants in place and cash flows.  That doesn't mean I still don't get calls with problems to fix, but you learn to adjust and treat it as business as usual.  The 2nd, 3rd, 4th deals get easier each time.  

    Give yourself some leeway on the first deal.  Its significantly more stressful the first time you're going through anything as you're learning as you go.  

    Congrats on getting it done!

    1Reply
  • NaDean Bowles
    Investor · Jacksonville, FL · Member since 2020 · 124 posts · 68 votes
    6y

    @Justin Johnson, How's it going?

    0Reply
  • Justin JohnsonPro Member
    OP
    Fort Smith, AR · Member since 2018 · 122 posts · 70 votes
    6y

    @NaDean Bowles, it goes well thank you for following up!  I got the smell eliminated *finally*.  That took a lot of work.  I have created a listing on Apartments.com and several other sites stating that the unit is "For Rent"!  Now I am just waiting and taking calls/answering questions.  I'm still trying to figure out how all of the application process works, I've always been the renter and now I'm the one renting the unit out :-)

    2Reply
  • Eddie Mart
    Member since 2018 · 6 posts · 1 vote
    6y

    @Justin Johnson

    You’ll be okay. Congrats on your new property. It gets easier as you move along.

    0Reply
  • Justin JohnsonPro Member
    OP
    Fort Smith, AR · Member since 2018 · 122 posts · 70 votes
    6y

    Thanks, @Eddie Mart, I've already learned so much and, more importantly, learned several big mistakes I made in the process and will hopefully not repeat those mistakes twice

    0Reply
  • Joe P.
    Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    6y

    @Justin Johnson remember I said earlier this is an operations business. Try to get yourself a process flow going NOW so when people are ready to put in an application, you're buttoned up to some acceptable degree. Brandon Turner has a free guide on how to rent your house, and it includes a section on application. 

    https://www.biggerpockets.com/blog/how-to-rent-your-house

    The best thing you can do for yourself is try to think through your major steps ahead, and plan for each. If you don't know what to do, research it.

    0Reply
  • Marlen Weber
    Specialist · Plano, TX · Member since 2020 · 2k+ posts · 861 votes
    6y

    Anything new can be scary, and fear doesn't have to necessarily be a bad thing. Use it to your advantage by allowing it to propel you forward. Congratulations on your first rental :)

    0Reply
  • Justin JohnsonPro Member
    OP
    Fort Smith, AR · Member since 2018 · 122 posts · 70 votes
    6y

    Lease signed and first tenant is set to move in on October 1st!  So much learning in such a short time.  I'm very excited about doing it again, and this time I'll know more and will approach it WAY differently.  Thank you, everyone on this thread, and to BP for the support and encouragement.

    0Reply
  • Jorge Saballeth
    Member since 2023 · 1 post · 0 votes
    2y
    Quote from @Justin Johnson:

    @Joe P. thank you!  I was just feeling overwhelmed with all of the goings on.  I had to move from my old place, clean it up, clean the new place, move in, organize it, clean the new place, get everything in place...I was just feeling like it was too much to do and take in.  Here is my final analysis done on the property. 

    I plan to hold onto this property for at least 1-2, unless I can find a way to get the total monthly cash flow bumped up considerably.  It is not under management and the lawn care is based on the lawn care company visiting twice a month and that will only be for about 2 more months until the grass has slowed way down as fall and winter approach.

     Hey @Justin Johnson, thanks for sharing your numbers for this rental. I'm new in the hood; did you get this 'one-pager' from BiggerPockets Tools?

    0Reply
  • Justin JohnsonPro Member
    OP
    Fort Smith, AR · Member since 2018 · 122 posts · 70 votes
    2y

    Yes I did.  And recently, I just purchased my second "home" where I will be living for a while and got that same duplex in the charge above fully rented out as of 2024-03-01!  Welcome to BP!

    0Reply
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