My first "intentional" real estate investment property
First and foremost, thanks to Bigger Pockets and all it’s wonderful members.
A little about my background….I’m active duty military, left home at the ripe age of 18.I have little real estate investing experience.I purchased a double wide 16 years ago.I lived in it for 2 years, rented it out for 5 yrs, then sold it to the neighbor.I didn’t know what I was doing.Several years later, I bought a foreclosure settled on about 7 acres that needed some work.I improved the property while living there.I sold it to a friend for a modest profit 3 years later.Three years ago I purchased the home we currently reside in.Another foreclosure that I got for 15% below market value. If sales pick up in the area, I'll sell. If not it will be a good rental.
I did some reading over the years and never lost interest in real estate.About 6 months ago, I picked up the pace when I realized I wanted to eventually become a full time real estate investor.That was when I decided I would be retiring from the military in 3 yrs (at the time).
So the search began.I was residing in TX.Figured it made since to start searching in KY since I would relocate there in a few years.
I found some friends/family willing to help in Ky.They looked at probably 20 houses.I made an offer on 7.Finally got an offer accepted on a HUD house. To complicate things a bit more, I'm currently deployed to S. Korea.My wife closed on the property on my behalf Tuesday!
This is a low income property.Acquired at $18,500.Rehab should be 5-6k.Arv 35k.It’s an older home with good bones.Updated electrical, plumbing, hvac.Not the norm for this area.Paid cash.
My wife is headed back to TX, so coordinating everything will become much more complex from this point forward.
A great friend of mine is handling 90% of the repairs.Most are cosmetic, floors, paint, appliances, doors, etc.Hopefully that works out.I told him if at any point things are interfering with our personal relationship, let me know because our friendship is more important.We’ll see how this turns out.I’ve heard it 1000 times, don’t mix friends/family and business.I guess I need to see for myself.
Plan A is to rent to section 8, as a 3 BR.This is the tricky part.It’s technically a 1 BR, 2 BA.However, the attic has been converted to living space (2 large rooms).The rooms are adequate size for BR’s however I’m hearing that they won’t meet conforming standards for a BR.The rooms have the sloped ceiling and no closets.Plan B is to find a conventional renter.Plan C is lease option.Plan D is conventional sale.Regardless, I’m comfortable it will cash flow.If I can get a section 8 renter, as a 3 BR is will cash flow nicely!
Struggles I’ve had up to this point:
1.HUD is slow and meticulous.Example, my wife didn't have the final amount due until 15 minutes after the closing apt. That was a challenge since we were wiring the money
2.I’m still seeking a property manager for this property.Several won’t accept new clients if they have less than 4 or 8 properties.
3.I would have never thought that I could pull this off from another country.I’m very excited to be taking action, but it won’t come without friction.Coordinating the repairs, locating property management, placing tenants will be a bit more challenging because of the distance.We’ll make it work.
4. My wife went to schedule to have the water turned on. They require the deed, drivers license and.......social security card? My wifes if 1000 miles away. We'll resolve that next week, just unexpected. My agent said she had never heard of this requirement.
I’ll continue to update as we make progress.
Thanks again BP!