One Small Success.
I'm writing to share the story of my first REI deal finally closing! I started an LLC and bought a cheap, dirty, nasty 3bd/1bath house in north Texas. I spent 6 weeks renovating the house and it cleaned up real nicely: new roof, new flooring, cleaned carpets, complete remodel of bathroom-saved the old tub, freshened up the kitchen, paint, etc... My goal was to renovate and resell to the retail market. I put it up on the market FSBO, and it sat, and sat, and sat, several price drops and 6 months later I couldn't stand it and hired an agent to sell it. 6 months, and 1 bad offer later I pulled it off the market and leased it up. It cash flowed nicely since I owned the property outright, and I kept it leased until this past december when I finally sold it for a 13% cash on cash return. not incredible returns I know, but hey I'm just happy it was a positive return! Some things I learned along the way:
-I'm not good at marketing-I need a pro to do that for me
-I was too proud of the property and had it over priced
-I learned that self managing a property long distance can be done, but it is a royal pain in the rear
-A GOOD property manager is worth every dime they charge. In my case I was unknowingly under charging for rent by $150/month! needless to say once I brought my manager on and she released the property to the higher rent rate I was all smiles.
-A network is important--like so many things it isn't necessarily what you know, but who you know.
-Don't ever quit trying, don't be afraid to change a plan that isn't working. Keep looking for opportunities, and have a back up plan.
It feels great to have finally completed my first deal, even though it took several years longer than I had planned. I want to move now from SFR to multi-family apartments, we'll see how that goes, if nothing else I'm sure I'll learn a lot!
Cheers,
Will