Newbie from Mountain View, CA
Dear BP community,
I would like to introduce myself. My name is Leo, I'm 24 years old and live in Mountain View, CA. Originally I'm from Germany but moved to Silicon Valley to work as a Software Engineer.
About a year ago I was looking at my investments and realized that I want more diversification than just stocks and bonds could offer me. Real estate came to my mind. Since I didn't know anything about real estate, I was looking into REITs at first but didn't like them. They seemed to perform just slightly better than stocks and bonds and there were some unknown tax consequences if I should want to move back to Germany. A little later I discovered the Bigger Pockets podcast and was excited to hear all those stories about successful investors!
You are lucky if you find a SFR for only a million dollars in Mountain View, even within an hour of driving distance you would still spend several hundred thousands of dollars for a SFR. Hence I decided to invest out of state (I took it literally).
Last December I pulled the trigger on my first rental property. I found it via Roofstock.com, it is in Lufkin, TX. Since then I already learned the hard way that I will do a better job at double checking somebody else's deal analysis.
So far, it seems like I'm out of luck with that property. A couple of days after closing, I got an email form the property manager that one of the rooms in the house doesn't get any air from the HVAC unit. In order to fix this, somebody had to install access to the attic. Getting the attic access cost me 1500 dollars. A little over two months ago, there was a flash flood and the garage floor was slightly under water. Since it seemed like this was a recurring problem, it is going to cost me 4800 dollars to install a drain outside of the garage. I didn't think about buying flood insurance because my property isn't required to have it.
Neither the property inspection, nor the appraisal mentioned anything about a potential for those two problems.
Overall, I'm hoping that this is just bad luck and that the future will bring me less problems at the property. Besides being more careful with analyzing the number of the deal, what would have done differently?
I'm planning on buying my second rental property by the end of this year, this time I will do more research on the estimated costs and will be a little bit more conservative.
Greetings
Leo