First offer in! The story of a newbies adventure into real estate invesment.
Put my first offer on a rental property on Friday, now the wait begins. I am a total newbie stepping into the uncharted waters of real estate investing. After countless hours and nights studying and playing with figures, reading horror stories and success stories, watching Flip This House and reading individual stories and hints and tips on this web page I took it all in and I think I did okay for my first time.
Time for a change-
I had a good amount of money put away in the bank, 50K, it wasnt doing squat as far as interest and something needed to change. I began toying with the idea that now its time to do something and it seemed that the housing market had some what stabilized and appeared to be on the slow creep upwards. I picked my target state, Florida, since it was one of the states that took a huge hit in the housing crash I figured I might be able to pick up a good home at a cheap price. I then chose to target an area I was familiar with the, Panhandle of Florida. I contacted 3 realtors and began working with them, out of the three only one stuck by me while the other two figured I was wasting their time since I am living in Virginia and thought I was a lost cause and just ditched me. After talking with the realtor she combed through countless properties I was interested in and I built a portfolio of potential buys. I took those properties then took their sales price and compared it to comps in the area as well as their tax assessed value. I took all the numbers plugged them into a mortgage calculator and using the targeted 50% range many on here talked about I used that as my goal number. After saving 54 properties to my favorites it came time to widdle that down to the contenders when it came time to take the trip down to see these properties. This took just over a month to do. During this time I did get a little nervous, okay a lot nervous, I mean I am about to take a huge leap and do something that I have no experience in. I read the beginner guide over and over, this cant fail!!
The trip-
So it came time to take the leap. I booked my flight, hotel and rental and was set on a 2 day rampage to see 17 properties. There was no turning back now, it was everybody in the pool or get the hell out of the way. Once the plane landed in FL at 11am I hit the hotel, showered to get the travel funk off of me and took a 20 minute power nap as the house hunting marathon was to begin at 1pm. I met my realtor and away we went, we covered 5 properties that night, out of the 5 only 1 serious candidate and one maybe. Hey this isn't to bad! Then day 2 came, we started off at 9am and then that's when doubt began to roll in. Home after home was trashed, shoddy do it your self work and slapped up extensions that I am sure were put up without permits. Neighborhoods that I wouldn't want to live in and no way would I want a family renting from me to live in. This is exactly where real estate pictures do not tell the whole story! I started loosing hope and began re thinking this whole investing thing. I asked the realtor to stop so we could get some lunch, I was drained and needed to recharge and rethink. While at lunch I spilled out all my concerns and dislikes to the realtor and she told me that we were going to skip seeing the rest of the homes I had picked in this area and that she was taking me to another section of town where I had two homes picked out to see. I still had my doubts, so far all the homes I had picked out were total duds, whats to say I didn't pick out more losers!
The other side of the tracks-
As we began heading over to this section of town where I had the two picked out to see one of them was one I considered a "no brainer". This was a little 2 bedroom 1 bath cottage recently renovated for 70K. The house was a short sale and had a tenant that just signed a 1 year lease this month for 900 a month. How could I lose? An offer for 64000 with 25000 down, taxes, insurance and manager fee put me at 425 with a return of 475 hot dog! During that ride over though I still couldn't get those other nightmares out of my head and began to think that this was another disaster in waiting. As we drove into this development my mood and attitude quickly changed. My realtor began giving me the history of this neighborhood. It was built back in the 40's and 50's on a peninsula. Tall oaks with Spanish moss hanging from the trees lined the streets, good old southern charm, quiet and tranquil. We pulled up to the "no brainer" and I fell in love with it. We went in and there she was, original hardwood floors refinished, a renovated kitchen, deck, new paint, updated appliances and best of all a tenant already in place. It didn't take long for the words to spill out "I want it and I want it now." We spent the rest of the day looking at homes in this neighborhood.
Crossing my fingers-
That next day the paper work was drawn up and an offer was put in for 60K. The property manager is in place, I used the same one that manages my aunts property, the bank is lined up and I have a safety net from what is left over backing me up just in case. After finishing up with all the running around on Friday to seal the deal I left to head back to the hotel with a sense of accomplishment and a greater outlook for my future. I had to say to myself, that wasn't as bad as I made it all out to be! I stuck to my guns and kept on trudging forward and pushed the fear aside every time it showed its head. Grant it I still have to wait and see if the offer is accepted or a counter offer comes back, but all in all I am ready to go after the next one!! All I can say to someone else that is in my shoes looking to take the plunge sift through this site. There are a lot of people on here with great information to give to people like me and it helps out a ton.