Got an investing story? I’d love to hear it!

7 Replies

I’d love to hear about one of your investments from start to finish in 30 minutes. 

YOU are the interviewee :) My name is Collin Milone and I'm a novice investor. I've spent the past four months reading about the basics of real estate investing, particularly the BRRRR strategy. One thing I've learned is the importance of listening. The BP podcast is great, but I don't want to hear about another "0 to 100" epic tale; instead, I'd love to hear how you added one property to your portfolio. If this sounds like something you'd be willing to do, please let me know!

@Collin Milone - it's a great way to learn. Others have had similar requests so we actually started doing these types of interviews with investors here in Chicago and transcribing them into stories. Each story focuses on a deal laced with hiccups the investor was forced to overcome (not the perfect BRRRR or flip where you made $XX)

Shoot me a DM and I'll send you the link. 

Originally posted by @Collin Milone :

I’d love to hear about one of your investments from start to finish in 30 minutes. 

YOU are the interviewee :) My name is Collin Milone and I'm a novice investor. I've spent the past four months reading about the basics of real estate investing, particularly the BRRRR strategy. One thing I've learned is the importance of listening. The BP podcast is great, but I don't want to hear about another "0 to 100" epic tale; instead, I'd love to hear how you added one property to your portfolio. If this sounds like something you'd be willing to do, please let me know!

A story we're experiencing now on a flip.  Backstory- Another investor could not finish the flip so we picked up the property for a good price. It's one of those properties that GCs hate going behind someone else's work. But the price was right and so....... On the surface, the property looks almost perfect and ready to sell. Behind the walls & under the house, however, there are problems. 

Problem 1- Fake air returns- It looks like something connected to the HVAC system but it's not. It's fake. 

Problem 2- Had to replace Brand New HVAC system with another one- Why? Incorrectly sized system. What's the impact of an incorrectly sized system- Temperature in the home never went above 65 on that cold 4 degrees Chicago days

Problem 3- Didn't insulate outside plumbing walls. Naturally, pipes burst on a 2-degree day, which was also compounded by the wrong size HVAC

Problem 4- This really isn't a problem but it reflects some of the BS that gives some contractors a bad name. We have to redo the outside porch. During the demo, our GC found the equivalent of 20 large trash bags of roofing material hidden under a section of the porch that was enclosed. Why was it there? The previous contractor replaced the roof but never took the old shingles and materials to the dump. He just hid it under the porch then closed the porch up.


All of this is the stuff that doesn't impact how the home looks from the interior or exterior but if you don't fix it your day will be ruined when you try and sell the place. Even w/ the problems the price point was right and so will the profits when sold.  Is that enough of a story for you.

 

@Collin Milone Interesting investing story... so I was under contract to purchase a 4-unit property. 2 buildings, each side by side duplexes. Friendly off-market transaction where the seller was older and retiring from being a landlord.

One roof was in very rough shape. A couple furnaces were very old. With that said, we were under contract as is. We budgeted to have the roof replaced and we were hoping the furnaces would stay alive a little longer...

My agent calls me to say that the roof has been replaced as well as 2 of the 4 furnaces. I was speechless. I asked what the —— he was talking about? We called the selling agent in shock. I guess the seller talked to his insurance agent and found out he could get a free roof. He also decided to replace the furnaces just because he felt bad. He confirmed that he didn’t want to adjust the purchase price. He just wanted to deliver the property in good shape.

A great surprise to me especially since the agreed upon purchase price included me factoring in the old roof and furnaces.

@Collin Milone There was very minimal rehab outside of those items. We replaced 2 windows. That was it. So we focused more on the management side. The property rents by bedroom. We increased from 5/8 bedrooms rented at time of purchase to 8/8 within 3 months of the purchase. The full occupancy has mostly held since the purchase which was 1.5 years ago.

The property has been our best property! Purchased for $425k, minimal rehab, it rents for $6800/month so the cash flow works well. Plus we bought it through a 1031 exchange so in terms of actual cash invested it truly has been a home run!!!! In terms of down payments this property was purchased with only $7.5k. With fees we’re probably in for $20k on a property with monthly cash flow of $1.5k and equity of $100k.

To clarify, the $7.5k down payment was on a previous property that we bought to owner occupy, then turned into a rental and later sold to do the 1031 into this property.

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