Help me adjust my expectations - first deal pending
Member since 2025 · 16 posts · 8 votes
Help me adjust my expectations - first deal pending
Most Popular Reply
Nicki ThiessenBusiness Member
Property Manager · Kansas City, MO · Member since 2017 · 2 posts · 8 votesI would be happy to talk with you about our property management if you are still looking. Most of our owners / investors are out of state and several in Colorado as well. Make sure you are working with a Realtor who specializes in investment properties because it isn't rare to think the property is rent ready and then it isn't. Unfortunately, we see that a lot. We are happy to help our investors who are growing their portfolio and work with their Realtors. We might even go out to a property prior to you purchasing and give you a scope of what will be needed to make it rent ready so you can make a good decision. At minimum we can give you accurate rents for the area to do your analysis.
As an investor (and previous Appraiser) myself, I have a little different way of looking at the vacancy, maintenance, and cap ex. Without doing a deep dive explanation on this forum, I will say that everyone can play with numbers to create whatever picture you want. Those numbers are arbitrary unlike taxes and insurance and they vary based on age, condition, area, landscape, PM, and other things. Yes, you have to consider those expenses and I'm not suggesting that you don't but why not 3% or 10%? Especially if you haven't seen the property and don't know what the variables are. We manage several properties where the tenants have been there for several years, and there is little maintenance. We also manage properties that have been neglected prior to us managing them and they require more. I'm not saying this is one, but don't miss out on a good opportunity based on arbitrary numbers. However, make sure you have reserves and know the condition of the property in case you have unexpected or initial expenses. I agree with @Gregory Schwartz that as long as your eyes are open, you are asking good questions, you have resources and have surrounded yourself with a good agent and PM, take the leap and learn as you go. I also know and have worked with @Caleb Brown and he certainly can be a good resource as well if you need one. Good Luck!
36 Replies
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
Jack:
I wouldn't argue against you doing your first deal. There is nothing you said that I find particularly scary. You would learn a lot from doing this deal. Still, it is not a great deal. It is not a great deal mostly, because of what you did not say.
I was hoping to hear you add something like this... "I'm going to put $30K into rehabbing it and it will be worth $200K when I'm done and rent for $300/mo more than it does now."
This is the piece savvy investors know how to do to unlock outsized profits..
- Member since 2025 · 16 posts · 8 votes1y
Quote from @Greg Scott:
Jack:
I wouldn't argue against you doing your first deal. There is nothing you said that I find particularly scary. You would learn a lot from doing this deal. Still, it is not a great deal. It is not a great deal mostly, because of what you did not say.
I was hoping to hear you add something like this... "I'm going to put $30K into rehabbing it and it will be worth $200K when I'm done and rent for $300/mo more than it does now."
This is the piece savvy investors know how to do to unlock outsized profits..
Thanks Greg. I appreciate the feedback. I'm not opposed to finding deals like what you talked about. I should have mentioned that I am out of state in Colorado and I'm not connected yet to contractors that I trust to do a rehab. I was hoping to do a deal and get my feet wet with something relatively simple to start. So I gather this isn't a deal that most of you with experience would do?
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
Quote from @Jack Cottrell:
Quote from @Greg Scott:
Jack:
I wouldn't argue against you doing your first deal. There is nothing you said that I find particularly scary. You would learn a lot from doing this deal. Still, it is not a great deal. It is not a great deal mostly, because of what you did not say.
I was hoping to hear you add something like this... "I'm going to put $30K into rehabbing it and it will be worth $200K when I'm done and rent for $300/mo more than it does now."
This is the piece savvy investors know how to do to unlock outsized profits..
Thanks Greg. I appreciate the feedback. I'm not opposed to finding deals like what you talked about. I should have mentioned that I am out of state in Colorado and I'm not connected yet to contractors that I trust to do a rehab. I was hoping to do a deal and get my feet wet with something relatively simple to start. So I gather this isn't a deal that most of you with experience would do?
The early portion of my career was buying turnkey rentals, like the one you described. The returns were OK, but nothing to write home about. The marginal returns drove me to seek other strategies.
So, this is not a "bad" deal if you consider it more of a learning experience than one that will make you a lot of money. The most important thing is to start, so I wouldn't discourage you from buying.
- Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes1y
What is rent on that project in KC?
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
i get nervous when new investors buy random properties out of state.
this is below the median price in KC, so i am assuming it may be in a more challenging neighborhood.
have you seen it yourself in person? is it occupied, or vacant? if occupied, what do you know about the current tenants? if vacant, does it need any work to be rent ready and stand out from the competition?
if your offer is accepted and you close, who is going to manage it for you? have you met the manager in person?here is what you DON'T want to do:
https://www.biggerpockets.com/forums/963/topics/1195280-expe...
https://www.biggerpockets.com/forums/48/topics/1160450-run-i...
https://www.biggerpockets.com/forums/48/topics/1137397-balti...
https://www.biggerpockets.com/forums/52/topics/1010977-12-00...
so, forgetting the numbers / purchase price etc. for a second - are you mitigating the risks that got those investors in trouble? or are you doing the same things? - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
what is the rent and prior to covid what was the appreciation from 2011-2020? Will you actually see any appreciation on the asset outside of worldwide crisis?
7e investments53 Reviews - Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
Happy to chat on the area. Some parts of KC is not great so you do have to be careful. If it is in a C/D area I would not be comfortable with breaking even.
- Member since 2025 · 16 posts · 8 votes1y
- Member since 2025 · 16 posts · 8 votes1yI haven't seen the property in person although my realtor has been there and sent a number of videos.
Quote from @Nicholas L.:
i get nervous when new investors buy random properties out of state.
this is below the median price in KC, so i am assuming it may be in a more challenging neighborhood.
have you seen it yourself in person? is it occupied, or vacant? if occupied, what do you know about the current tenants? if vacant, does it need any work to be rent ready and stand out from the competition?
if your offer is accepted and you close, who is going to manage it for you? have you met the manager in person?here is what you DON'T want to do:
https://www.biggerpockets.com/forums/963/topics/1195280-expe...
https://www.biggerpockets.com/forums/48/topics/1160450-run-i...
https://www.biggerpockets.com/forums/48/topics/1137397-balti...
https://www.biggerpockets.com/forums/52/topics/1010977-12-00...
so, forgetting the numbers / purchase price etc. for a second - are you mitigating the risks that got those investors in trouble? or are you doing the same things?
No renters currently. It'll need some trim and paint on the inside as well as some cleaning and minor touch-up, so I wouldn't consider it far off from being rent ready.
I am interviewing property managers now and trying to ask all the right questions.
Thank you for sending over those articles. I'll go through them right now! - Member since 2025 · 16 posts · 8 votes1y
Quote from @Chris Seveney:
Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
what is the rent and prior to covid what was the appreciation from 2011-2020? Will you actually see any appreciation on the asset outside of worldwide crisis?
Rent I'm looking for is $1350. Good qestion about the appreciation. Where do I go to find that information about how much it may have appreciated during that timeframe? Thanks for the input!
- Member since 2025 · 16 posts · 8 votes1yIt looks to be between Blue Hills and the research hospital. What would the grade be considered in an area like that? C?
Quote from @Caleb Brown:
Happy to chat on the area. Some parts of KC is not great so you do have to be careful. If it is in a C/D area I would not be comfortable with breaking even.
- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes1y
Quote from @Jack Cottrell:
It looks to be between Blue Hills and the research hospital. What would the grade be considered in an area like that? C?Quote from @Caleb Brown:
Happy to chat on the area. Some parts of KC is not great so you do have to be careful. If it is in a C/D area I would not be comfortable with breaking even.
That area is up and coming. It is still C ish area though. How close is it to Paseo? Ideally you want to be West of HWY 71
- Rental Property Investor · Perry Hall, MD · Member since 2016 · 586 posts · 598 votes1y
Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
The rule of 5's, or 5% for capex, maintenance and vacancies is going to get you in trouble. I think it's far too optimistic. I'd suggest using a minimum of 25% of gross rent to cover expenses on paper until proven otherwise on any given property.
Only you can decide how much cash flow is acceptable but I wouldn't consider something that essentially breaks even. Can you put more down to increase cash flow? Sure. Should you? That's up to you. What ROI do you need to justify the liability and active nature of owning a rental property? I assure you even with a property manager, it's not passive.Just remember the point is to make money, not to own doors.
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
"I haven't seen the property in person although my realtor has been there"
famous last words.
sounds like @Caleb Brown can offer a ton of value here - i'd connect with him
- Member since 2025 · 16 posts · 8 votes1y
Quote from @Caleb Brown:
Quote from @Jack Cottrell:
It looks to be between Blue Hills and the research hospital. What would the grade be considered in an area like that? C?Quote from @Caleb Brown:
Happy to chat on the area. Some parts of KC is not great so you do have to be careful. If it is in a C/D area I would not be comfortable with breaking even.
That area is up and coming. It is still C ish area though. How close is it to Paseo? Ideally you want to be West of HWY 71
It is halfway between Paseo and 71
- 1yFrank PyleBusiness MemberSpecialist · USA · Member since 2024 · 279 posts · 130 votes
Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
It’s great to see how proactive you’re being with your real estate investing! Starting with a single-family home in Kansas City is a smart move, and it sounds like you’re really digging into the numbers, which is super important for making informed decisions.
From what you’ve shared, your offer of $140,000 with an 8% interest rate and a 20% down payment seems like a solid starting point. Just remember to factor in management fees, vacancy rates, maintenance, and capital expenditures, as these can really impact your cash flow. It’s also awesome that you’re close to breaking even—many new investors find themselves in that position. If you can swing it, increasing your down payment to 25% or more might help boost your cash flow and make your investment even more sustainable.
Your long-term goal of buying and holding, with a target of 20 properties, is definitely a winning strategy. Many successful investors follow a similar path to grow their wealth over time. Just stay flexible and be ready to adapt to market changes or your own financial situation. Connecting with experienced investors or mentors can also provide some great insights and open up new opportunities you might not have thought of yet. Overall, you’re on a promising journey, so keep learning and adjusting as you go. Best of luck with your first offer! - 1yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votesAt $1350 rent:
Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
- sustained maintenance/cap ex will far exceed 10%
- I will be surprised if you can find someone to manage this one unit at $108/month. Jaybe if you had a few units this can be achieved.
- 20with the unit being empty and in need of some TLC, 5% vacancy will be too low.
a property that cost $140k has not had appreciation that has kept up with appreciation. These properties typically do not have rent growth that keeps up with inflation. This implies the return has to be via cash flow but you indicate with your numbers it is pretty close to break even. This means with my numbers it will be cash negative.
how will this help you scale to 3 to 4 deals a year to get to 20 deals? I see this making it hard to scale.
question: how come your rate is so poor? Do you have a good credit score? If not, work on Improving it before purchasing an investment property. Better rate would help your cash flow.
i would pass, more relevant is I recommend you pass on this purchase.
good kuck - 1yGregory SchwartzBusiness MemberRental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
@Jack Cottrell I can relate. I made more mistakes on my first investment than I can count. Mine was also out of state, in a town I’d never visited, and I relied heavily on videos from my agent.
This sounds like a tough first deal, but it seems like you have some capital on the side, which will be useful as you face the upcoming challenges and learn from those expensive early mistakes.
Regarding the subject of this post, “help me adjust my expectations,” I’d recommend assuming that; repairs will cost twice as much as you estimate, maintenance and vacancy rates will likely double from your initial projections, there’s a very real chance you may lose money on this deal.
That said, there are ways to mitigate these risks by:
- Keep asking questions here on BP and connecting with local experts
- Stay proactive and communicative with your agent and property manager.And remember “Inspect what you expect.”
Im not trying to discourage you but to help reset your expectations. This sounds like a challenging property, so it’s important to be prepared.
Good luck! Let us know we can help
Schwartz Realty Group5116 Reviews - Financial Advisor · Issaquah, WA · Member since 2017 · 241 posts · 141 votes1y
I have two properties in the Blue Hills area, which have historically done well. Rents have softened, though, and currently experiencing an extended vacancy in one.
The advice you're hearing here is sound. Expect your expenses to be higher than you you're seeing on paper. Keep liquid reserves from the start (issues like to crop up right away). If you haven't gotten an insurance quote yet, you should go do that now; those insurance costs have been skyrocketing for the last few years and are changing the math on many of my properties.
Personally (and I mean this--it's personal to each of us), nothing about the deal you're describing excites me. Finding some sort of value-add aspect or buying at a discount means you either create or walk into equity, which protects you.
- Member since 2025 · 16 posts · 8 votes1yHi Dan, thanks for the reply. I appreciate you working through all the various points you mentioned.
Quote from @Dan H.:
At $1350 rent:Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
- sustained maintenance/cap ex will far exceed 10%
- I will be surprised if you can find someone to manage this one unit at $108/month. Jaybe if you had a few units this can be achieved.
- 20with the unit being empty and in need of some TLC, 5% vacancy will be too low.
a property that cost $140k has not had appreciation that has kept up with appreciation. These properties typically do not have rent growth that keeps up with inflation. This implies the return has to be via cash flow but you indicate with your numbers it is pretty close to break even. This means with my numbers it will be cash negative.
how will this help you scale to 3 to 4 deals a year to get to 20 deals? I see this making it hard to scale.
question: how come your rate is so poor? Do you have a good credit score? If not, work on Improving it before purchasing an investment property. Better rate would help your cash flow.
i would pass, more relevant is I recommend you pass on this purchase.
good kuck
Is it a common issue for beginners to get a PM on board with only 1 property to manage to start? I don't know how to avoid it. The plan is to buy more this year, but I can only do one deal at a time. Do managers that advertise 8% only do 8% when there's a bundle of doors to manage?
I have a 780 credit score and no debt besides my personal residence. What kind of rate should I be able to get right now?
I have enough to put 25 or 30% down. But I'm gathering that this may be a fools errand if the house is not appreciating. I'm in it for the long haul so if it doesn't work on a small scale, it won't work on a large scale.
The general advice I'm hearing is that if I want what I'm looking for, then avoiding a C property is the route. Would you agree? I can afford to invest in B properties with larger down payments but I guess it means I may be doing more like 2-3 deals per year than 3-4. - Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes1y
It's very difficult to get SFR to cash flow these days with interest rates as high as they are. Honestly, I think you're estimated expenses are a bit low. You can probably beat $2000/year insurance, but the management fee should be 10%, you need to factor in turnover too and 5% is probably not enough for both maintenance and turnover and I assume you added it, but you didn't mention property taxes (which have been terrible in Jackson County lately since Frank White decided to jack them through the roof).
- 1yDan H.Pro MemberInvestor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
Quote from @Jack Cottrell:
Hi Dan, thanks for the reply. I appreciate you working through all the various points you mentioned.Quote from @Dan H.:
At $1350 rent:Quote from @Jack Cottrell:
I'm a complete noob. I'm planning to put in my first offer on my first rental on a SFH in Kansas City in the next day or two.
$140k offer
8% interest rate
20% down
8% management fee
5% vacancy
5% maintenance
5% cap ex
I haven't gotten insurance costs yet but it's been suggested that I plan for $2k per year.
Once I plug in all those numbers, I'm pretty close to breaking even. I have the ability to put 25% down or more to increase cash flow. I just want some outside eyes to help me understand if this deal is what I should expect to find as I build my portfolio.
I plan to buy and hold long term. I am expecting to do 3-4 deals per year until I get to 20 properties or so and then snowball the debt so they are all paid off by retirement.
Am I ok with this plan to ride up the appreciation, mortgage pay down and rising rents? Or is this type of deal that you savvy investors out there would scrap and try to be more aggressive? Any thoughts are appreciated!
- sustained maintenance/cap ex will far exceed 10%
- I will be surprised if you can find someone to manage this one unit at $108/month. Jaybe if you had a few units this can be achieved.
- 20with the unit being empty and in need of some TLC, 5% vacancy will be too low.
a property that cost $140k has not had appreciation that has kept up with appreciation. These properties typically do not have rent growth that keeps up with inflation. This implies the return has to be via cash flow but you indicate with your numbers it is pretty close to break even. This means with my numbers it will be cash negative.
how will this help you scale to 3 to 4 deals a year to get to 20 deals? I see this making it hard to scale.
question: how come your rate is so poor? Do you have a good credit score? If not, work on Improving it before purchasing an investment property. Better rate would help your cash flow.
i would pass, more relevant is I recommend you pass on this purchase.
good kuck
Is it a common issue for beginners to get a PM on board with only 1 property to manage to start? I don't know how to avoid it. The plan is to buy more this year, but I can only do one deal at a time. Do managers that advertise 8% only do 8% when there's a bundle of doors to manage?
I have a 780 credit score and no debt besides my personal residence. What kind of rate should I be able to get right now?
I have enough to put 25 or 30% down. But I'm gathering that this may be a fools errand if the house is not appreciating. I'm in it for the long haul so if it doesn't work on a small scale, it won't work on a large scale.
The general advice I'm hearing is that if I want what I'm looking for, then avoiding a C property is the route. Would you agree? I can afford to invest in B properties with larger down payments but I guess it means I may be doing more like 2-3 deals per year than 3-4.Look at the PM contract and verify the 8% is all inclusive and that there are not additional charges for placing a tenant, resigning a tenant, inspections, and dealing with vendors/contractors. At that percentage on that rent amount I suspect it is not all inclusive, but I do not know that market. My expection is at that rent point, all inclusive Pm would be at least 10%.
You have a good credit score. no one, including my score, is going to be much higher. Are you using a mortgage broker? Who quoted 8%? I locked last week at 6.385%, 75% LTV, 2 year PP, 2 pts on a DSCR. I expect conventional to be lower than DSCR. I suspect without the 2 pts I would be at ~6.625% to 6.75%.
What I recommend most is accurate, conservative underwriting. Class C is more work than class B, but if managed well can do great. Class B is less work but less initial cash flow. Do class b for less risk and less effort. I think I would recommend people start class b but I recognize the challenges to get the numbers to work. If I was starting over, I would go higher class than I started with. Back when we started virtually everything had positive cash flow but I was lured by the seemingly higher cash flow associated with class C. My last 2 purchases and the luxury cabin I am under contract currently are all at least class B.
Good luck
- Member since 2025 · 16 posts · 8 votes1yThanks Gregory for the thoughtful response. Luckily I'm not locked into this deal and I'm going to pass based on the feedback I'm receiving. I'm in a position to be able to buy what I want, and being new, I am hoping to leverage the group's experience and avoid the headaches one creates for one's self.
Quote from @Gregory Schwartz:
@Jack Cottrell I can relate. I made more mistakes on my first investment than I can count. Mine was also out of state, in a town I’d never visited, and I relied heavily on videos from my agent.
This sounds like a tough first deal, but it seems like you have some capital on the side, which will be useful as you face the upcoming challenges and learn from those expensive early mistakes.
Regarding the subject of this post, “help me adjust my expectations,” I’d recommend assuming that; repairs will cost twice as much as you estimate, maintenance and vacancy rates will likely double from your initial projections, there’s a very real chance you may lose money on this deal.
That said, there are ways to mitigate these risks by:
- Keep asking questions here on BP and connecting with local experts
- Stay proactive and communicative with your agent and property manager.And remember “Inspect what you expect.”
Im not trying to discourage you but to help reset your expectations. This sounds like a challenging property, so it’s important to be prepared.
Good luck! Let us know we can help
I honestly just need a place to put money. I'm not trying to make this venture complicated or even hit home runs on every deal. I have a business that I put all my efforts into which make me enough to live on. So while I greatly appreciate all the different methods of making money with real estate and even more impressed with all the hustlers that grind here in this community, I just need properties that I can get at a good deal that cash flow and appreciate while minimizing the trouble commonly associated with real estate.
I can already hear the pushback in my own head: "real estate isn't passive!" and "you have unrealistic expectations!" and I get that. I want to avoid the avoidables and build a solid team that works as hard as I do. I guess that is probably the crux of my questions. If you're in my situation, what properties are you buying? - 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
Based on the purchase price, it is probably an older home as well. One capex issue or tenant turnover is going to eat up years of "cashflow".
I would advise you to work on getting a smaller number of high quality units rather than scaling to 20. Instead of buying four $150k houses per year, try to get one $400-600k property (SFH or small multifamily) and get creative with higher effort strategies to cash flow in year 1 and 2.
- 1yGregory SchwartzBusiness MemberRental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
I think you're in a great spot and are asking the right questions. My biggest recommendation is to not get caught in analysis paralysis. I overanalyzed for way too long. Run realistic numbers and be prepared for the worst. Pull the trigger and learn as you go.
Schwartz Realty Group5116 Reviews
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