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
6y
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)?
Rental Property Investor · Dothan, AL · Member since 2019 · 35 posts · 32 votes
6y
@Bernie Neyer i actually have to go there tomorrow. And will give you the exact demensions and prices. They're currently running a sale. I can buy them for you
Rental Property Investor · Colorado Springs, CO · Member since 2015 · 50 posts · 19 votes
6y
@Kam Mill do you have to update the flooring now? If you don’t I would say leave it. A good steam clean of the carpets may bring them back to life. Let the tenants pay for the Reno. Lock up those leases and when tenants move out make those upgrades as needed.
@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
That's the keyword right there: TEAMWORK (or partnership) and your 100-units goal is definitely possible.
Rental Property Investor · Cinnaminson, NJ · Member since 2018 · 53 posts · 32 votes
6y
Well, a quitclaim deed is filed through the county and can be done quickly. You could use a title company. I do it directly through the county. It's pretty simple.
Real Estate Agent · West Linn, OR · Member since 2014 · 28 posts · 13 votes
6y
@Kam Mill Great job on your first acquisition! Advice going forward.
1. Keep taking action toward that long term goal.
2. Your main focus with the rehab should be tenant proofing this investment. Your rehab costs are very low. These should not be thought of how can I get this completed for the least of money out of pocket. Do a proper high quality update now with the most most durable, longest lasting materials. Spend more upfront and you will have less headache and out of pocket expenses now. Darren Sager in Bigger Pockets is an expert in this area.
3. Look into LVT flooring, make sure your toilets are not low end Home Depot. It doesn’t matter if they were installed yesterday. If they are low quality, you will eventually have problems with them.
4. After a quality rehab your property will appraise higher and you can pull out more cash. Based on the numbers you provided, it looks like you can already pull out about 10k. That would likely go up with a better renovation.
Read about the BRRR strategy on the forums.
That’s all for now. Great job and hit me up anytime.
Congradulations Cam! It sounds like you found a good deal and are ready to make it work. One thing I would definitely double check is the foundation. I know a lot of newer investors will forget to check and that can be really costly down the road.
Realtor · Boston, MA · Member since 2019 · 30 posts · 9 votes
6y
use click in flooring for a lower grade home like this. Cheaper and you can do it yourself. Search the installation videos on youtube. There are different types. I put in for bedrooms, living room and bathroom for not even low grade. Looks great and feels great. Waterproof/water resistant.
Rental Property Investor · Poughkeepsie, NY (Hudson Valley Area) · Member since 2019 · 188 posts · 102 votes
6y
@Kam Mill $1000 for all that you mentioned, do you have a contractor that gave you a quote or are these numbers you estimated. Definitely consider researching property managers and start advertising it as a rental (#BARRR)
Rental Property Investor · Poughkeepsie, NY (Hudson Valley Area) · Member since 2019 · 188 posts · 102 votes
6y
@Chris Carrillo you should probably elaborate on your opinion. I also had a bad experience with section 8. Only because they were not the best tenants, I know good people on section 8, it’s just an expense you should have in the reserves and not consider it guaranteed money as they can loose it if they fail to meet the terms or fail an inspection. In that case cash for keys right away, don’t try to squeeze water out of a rock or go through the eviction process. Ensure your contact information is up to date so that the office can contact you if they default on their terms.
Rental Property Investor · East Longmeadow, MA · Member since 2019 · 154 posts · 64 votes
6y
@Kam Mill I upgraded to bigger pockets pro and used the calculator. Then I am getting the rent o meter pro as well. What’s the monthly cash flow? Is it better to resell at 65 or arv as a flip? Like some have said need more info good luck
Investor · Little Rock, IA · Member since 2015 · 136 posts · 72 votes
6y
@Kam Mill. Congratulations! Sounds a like a good buy!! I am trying to get one of my rentals into the Section 8 program. I think there is good money in it. Your on the right track in my opinion. Welcome to the Landlord Club!!
Specialist · Member since 2019 · 137 posts · 125 votes
6y
@Kam Mill (i just saw your response to me). I've started the business I have which required putting resources into that while looking at changing my strategy so now I'm down to just 1 vacation rental property out-of-state. There are just so many ways to structure a REI business in terms of types of investments and I feel I've learned more in the last year about options I never even considered, such a micro-flipping, house hacking, etc. It's good you are building a relationship with Section 8 now - I think the people who do that tend to have a much better experience & of course your property manager plays a big role in that. Good luck! I know you're going to do great.