I Finally Did It!

33 Replies

After 6 months waiting, I finally closed on my first 9 unit MF deal this morning!!!!

And, my general contractor quit earlier this week because he has other jobs that keep getting bigger (and he probably got tired of waiting on me), so I am starting from scratch ...

Take a deep breath, I can do this!!!

You can definitely do this. Great job on being patient and getting the deal done. Care to share the details of the property? Scope of work that needs to be done?

Congratulation! I can't wait until I do my first deal.

Congrats Kim!!

And your first one is a 9 unit MF....Awsome!!

Sure, @Luke W. here are the details:

B+ area (C property.... because it needs a lot of TLC, not because of previous tenants)

9 Units

Purchase price - $373,450

Estimated Rental Income - $9625 per month (all units are vacant now for the remodel)

Maintenance - 15%

Property Management - 7%

Insurance - $6500 per year

Utilities - $200 per month (light pole, irrigation)

Landscaping - $250 per month

Ongoing capital expense - 10%

Taxes - 2.19%

Estimated Vacancy - 5% (after 6 months)

Estimated Rehab Cost - $125,000

Estimated Time for Rehab and Filling Vacancies - 3-6 months

@Mark Ferguson I listened to your podcast yesterday! You give me hope :)

Thanks everyone for the encouragement!

Congrats - This wont be the last time jobs get conflicted with schedule. Im in the process of developing a team myself (2 of everything, contractors, plumbers, handyman, electrician,...).

Wonderful start!!!

Nice work Kim! Let us know how it goes, and if you have any questions along the way don't hesitate to ask. There is a ton of experience here on BP!

Congrats! May I ask how you sourced the deal? Direct mailing, networking, etc etc...

Thanks everyone, it's been a stressful weekend as I am feeling a little overwhelmed. But you are correct, it will be good in the end

@Amir Pasha Esfandiary I am an agent and found the deal in MLS. I did have to put an offer in without first seeing the interiors because there were quite a few interested buyers waiting for appointments. I just used my feasibility period for viewing and due diligence.

Congratulations on purchasing your new nightmare!!! Haha

@Seth S. not so funny! You must have been in my thoughts all weekend. I think I've come to the conclusion that the worst thing that can happen is that I turn around and stick a for-sale sign back in the yard and call it a day. But I've waited 6 months and even though my GC left me and I am starting all alone, I know this isn't rocket science and I have enough contacts in the industry that I can make some calls tomorrow morning and all will be ok!

@Account Closed I shed a mental tear for you. I know that your lack of knowledge is goingg to end up costing you lots of money, to the point of putting you out of business. You must do the legwork. Must must must. How do you know what a good price for contractor is? How do ypu know they know what they are doing? How do you know its necessary? How do you know that they didnt cut any corners? Rocket science? No...experience needed to not get screwed? Absolutely.....imagine it like you are playing 15 games of chess simultaneously.....only youve never played chess before. I would suggest you pay an experienced investor to guide you. I would think the education from a well seasoned landlord would be worth its weight in gold. You need it. What iff that 125000 rehab should actually be 60000? Big savings. Things like that are key that you probably wouldnt be able to determine.

@Seth S. I appreciate the advice. I don't think the situation is quite that bad that I need to pay someone to help me through it. Plus, I can get all of the advice and answers I need right here on BP.

Although I have not owned a MF in the past, I do have 10 years experience in real estate and own several other rental properties (SF and commercial). And have even done a very successful flip, which I sold with owner financing. I have experience in remodels and I am 95% sure that my estimated costs are on target. My budget includes overages for unknowns and I will be working with individual contractors that I have worked with for years on other client projects and my own. The only difference now is that I won't be paying a GC, I will be acting as one myself, which may require that I temporarily put my real estate sales career on hold, but that's ok with me.

I could probably rent the units as is if I wanted to take a little less rent. All of the units are in livable condition (except one) and rental properties are in high demand in the area.

Good luck

Well done! Im getting ready to close on my first duplex so I know what youre feeling!

Originally posted by @J Scott:
Originally posted by @Seth Sherman:
@Kim H. I shed a mental tear for you. I know that your lack of knowledge is goingg to end up costing you lots of money, to the point of putting you out of business.

Was that really necessary?

Hows your rental property going? Found a section 8 tenant to ***** incessantly and destroy your house without being accountable for any of it? I cant wait to read your updates as your tone gradually changes when dealing with tenants. Clearly if i wrote it i felt it to be necessary, dad. Being a landlord is a harsh world where nice landlords get stomped on. I hope she doesnt suffer the rude awakening of carrying a half million nut while depending on people trying every way to not pay their rent to cover it.

@J Scott Seriously...

@Account Closed keep us update. I'm sure you'll do well. You already have a back up plan that in the worst case scenario you can re-sell, possibly at a profit, if you market it well and do some cosmetics.

Remember to get tons of estimates, and references from contractors.

Please keep us all updated on how this goes.

Originally posted by @Seth S. :

Hows your rental property going? Found a section 8 tenant to ***** incessantly and destroy your house without being accountable for any of it? I cant wait to read your updates as your tone gradually changes when dealing with tenants. Clearly if i wrote it i felt it to be necessary, dad. Being a landlord is a harsh world where nice landlords get stomped on. I hope she doesnt suffer the rude awakening of carrying a half million nut while depending on people trying every way to not pay their rent to cover it.

Being a landlord can be a pain in the ***, but it's still quite profitable in the long run. I'm a long time landlord and have dealth with many crappy tenants who have literally destroyed the insides of newly remodeled units.

Or tenants who are late every month and have every excuse in the book why they can't pay the rent, but will get new chrome wheels on their cars and a flat screen tv.

Then I look at the passive income I get and the flexible lifestyle and schedule it gives me..... deep breath...life is good ^_^

In the long run you will most likely make money though. In 10 years Kim will be happy she did this when she has a property worth more than double and that brings in positive cashflow with decent tenants -- Appreciation, rent increases, inflation, and "passive" income