Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
I recently won a bid on my first rental property.
Asking was 37000
Won bid on 34000
Appraised for 55k
Single family 4 bed 1.5 bath 1200 sq
In subdivision of rental area.
Located in Webb,al. 15 mins from Dothan, Al.
House is walking distance to dollar general and major steel factory. Good subdivision
Newer roof, no major repairs needed
Section 8 will pay 800 a month min.
I decided to put in business name llc. It delayed process. Closing is in a couple weeks.
HELP LOL.
I have been watching bigger pockets for 2 months and decided to jump in. And other investor podcasts and all. Rich dad poopr dad saved my future from rat race. Any and all advice needed
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
At first blush, @Kam Mill, you're beating the 2% rule, which is great, but not the whole story.
You said no major repairs. There's sure to be some deferred maintenance. How much is required?
Have you inspected the property and all of it's systems?
What are ALL of the expenses?
What are your financing details?
You wrote that "Section 8 will pay $800/month." Has this been inspected and approved by Sec. 8 yet? Will the land lord be responsible for utilities (they are in many Sec. 8)?
Investor · Birmingham, AL · Member since 2016 · 315 posts · 206 votes
7y
Congrats. You are now in “ tenant and toilet business “ As far as light rehab budget I would allow 4-5 thousand as someone else has said. I have had to do 2 in the last 18 months. One had new flooring paint appliances etc and it ran over 8 grand. The others was about $2500 with paint and rehab bathroom. As far as doing it all yourself you have to remember that for every week or month it takes you to do it there is no revenue and revenue solves a lot of problems. The next hurdle you face is getting a good tenant into the house and that is were you are going to learn a lot . Good luck 😉 JP
Rental Property Investor · Winter Haven, FL · Member since 2018 · 68 posts · 20 votes
7y
@Kam Mill just be careful when updating the property not to over-exceed the neighborhood. Location plays more of a role in value than anything else. Picture it like this.. would you pay full price for a mansion, if it was located in the middle of a trailer park? Probably not. Buyers and renters are going to look at your property's value the same way.
Homeowner · Canton, GA · Member since 2014 · 16 posts · 5 votes
7y
@Kam Mill Do you really think you need to put hardwoods in and remove popcorn ceilings in section 8 housing? Are you painting the ceiling because of stains? Water damage? Smoke? Your numbers sound great! You should be able to do a cosmetic rehab and come out pretty good on cash flow.
Rental Property Investor · Mississippi Gulf Coast · Member since 2019 · 2 posts · 3 votes
7y
Congratulations on your first rental property, don't spend too much time stressing over this, the numbers look good on the purchase price, rental will provide good cash flow. Cost to rehab may be a little more than you expect, but don't worry this is the best training you can get. The numbers look like you will make it through this just fine and with a lot more experience and ready for the next opportunity.
Specialist · Member since 2019 · 137 posts · 125 votes
7y
Congrats and welcome! It seems like from first glance you got a good deal and did your homework but I agree with the other posters, I'd budget a bit more $4-$5k or rehab. Section 8 is not the easiest, but there are a lot of landlords who have good relationships with the local Section 8 office & feel that it is well worth it but they also push for Section 8 to do their inspections rather than worry about the inspections. Just keep in mind to have some set aside because if the tenant does damage the property and an inspector determines it is a certain type of hazardous violation you might be given on 24 - 48 hours to fix it, and then you can make a complaint to Section 8 about the damage. The renter won't have the means to pay and I read that Section 8 on move-outs will require renters to pay back repairs in payment plans or lose Section 8 - but that seems to be more rare than standard. Also, because you are using the LLC just make sure that you write all your checks and accept all payments in your LLC. Keep your accounting separated as well to keep a layer between you personally and your business. Oh and Good Luck!!!
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Clint Shelley hey yeah i hope to come in way below 4k for reno. It really doesnt need any work. Its a foreclosure property left in good condition. Bathroom has new fixtures and appliances. Which home do you have in neighborhood
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Ola Dantis hey thanks for the advice. Yes im already learning through this experience. Im open to all advice. My goal of 100 units can be done with teamwork
Investor · Otsego, MN · Member since 2014 · 45 posts · 29 votes
7y
@Kam Mill Congrats Kam! If dealing with contractor make sure to get everything in writing. Get listed for rent ASAP! If all else fails very cheap education to get you ready for the next one !
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@John Patton hey i have some guys ready to get started. I have some guys from church who do it all. They will do rehab for fraction of cost. Time is money. Im going have a property mgmt company handle the tenantz. This company has a great reputation
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Parker Eberhard. Hey thats a great idea. I will look into it. I have seen there is a spray that i can use to remove it easily. I will look into that.... great idea and advice
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@John Thomson i really dont need the hard wood. Im going to get the carpet cleaned and stretched. Yes just a cosmetic rehab. Bathroom has already been rehabbed
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@John Thomson just painting for fresh paint on ceiling. Not needed however i would like a fresh ceiling because i will be either removing the popcorn off ceiling or covering the ceiling.
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Bud Evans hey i wish i would have known this prior. Yes it halted my closing date, since i changed it to a rental property. How does your process work exactly?
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Jennifer Gligoric hey thanks for the advice. Im building a relationship with Section 8 office now. My family have some properties on Section 8, so im kinda familiar with them. They're not to strict here, however, i will have a property mgmt compnay that will manage it for 10 percent of rent. Please continue to critique and help guide me. How many properties do you have?
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
7y
@Maurice J. I have some guys from church that do construction. Im hoping they're good with business and not have the horror stories. I have know these guys since i was in childhood age. So hopefully it will go accordingly. Yes most def will have them write it down everything.