BRRRR 101 - My 1st venture
Hey all,
11/12/19 Just dove in! .... went under contract on my first investment property yesterday. Thought I would start a journal so that others can benefit from my pitfalls and hopeful successes along the way. After a lot of research I decided on the Durham, NC area to make my first leap. I live in CA but have been shopping in the Durham area for a while. I like the job/population growth, big tech sector, the various Universities, and the fact that there are reasonable deals still to be found. I settled on a 4/2 duplex I found on the MLS in the Albright area (about a mile from downtown) which I purchased for $136K (asking price). There was one other offer which the owner was going to accept, but I put a $3k due diligence deposit down and won the deal. Hopefully it appraises for at least the list price (otherwise, I can bail but will lose my $3K if the appraisal goes horribly wrong) I have 3 weeks of due diligence to figure it out. Not really a true rehab needed, one of the two units has already been renovated and the other needs minor work but already has a tenant (although they are paying way under market on a month to month). My plan is to do light rehab, find a tenant for the second unit and hopefully increase rent on the first unit, then cash-out refinance in 6 months after the seasoning period. Not sure how much of my conventional loan $30K (including closing costs) that I'll get back after the refi but if my numbers play out as I hope I should do ok, and at least have a little cash flow in the end. I'll be in Durham next week to walk through the property with the inspector and contractor (when I find one) and find out truly what In have gotten myself into. Nail biting time. Wish me luck!
11/13/19 Just finished assembling my "Core Four'. My realtor in Durham who has really been hustling to find me properties and sending me detailed videos, etc referred me to a contractor today. Anyone on BP have advice on how to properly vet a contractor??? The realtor also referred the local lender which I am doing a conventional loan through. And I found a local property management company which has a good track record which I will meet with next week as well .... hopefully they can all deliver.