A year in review -2017.. Where do you go from here?
*Please keep in mind while reading this that I work 45-50 hrs a week in my corporate W2 job*
2017, or rather tail end of 2016 was the first year that I got really serious about Real Estate Investing. Prior to that, I pretty much had followed, buy, rehab, live, and then rent (after a yr) kind of strategy. That's a good start for anyone wanting to get started in RE, but that's not a scalable approach. I quickly realized as became active on the boards that 'real' investors did things a little differently.
Jan- April.
So I looked around the boards and got really interested in flipping. I even downloaded and read J Scott's book on flipping. Great book. I busted my a$$ for 3 months trying to find a single deal to flip. Even got in touch with HML. Finally found a deal, and went under contract only to discover at a later stage that there was a major encumberance issue that was unresolved. I won't get into details of that for the sake of this post, but long story short, the title insurance could not be obtained unless the issue was resolved, and given the uncooperative seller and incompetent agent, it was next to impossible to achieve. I decided to move on.
I quickly realized that I may have done lot of groundwork necessary to educate myself, increase my network for flipping, but immediate DC-Metro area was not conducive to flipping in the current 2017 real estate landscape.
May-June
Since, the immediate DC Metro area is not conducive for flipping, I decided to explore Richmond area. Richmond, VA is about 120-140 Miles from where I live. Not bad. I can make a quick day trip if I find something. Found a great realtor to work with and visited some properties. I found same issue with Richmond properties that I had with properties in DC Metro area. Properties are selling too close to the ARV, not leaving much room for flipping activity. So, I changed my strategy. It was June already, and I thought instead of trying to chase flips, I should look for what can be achieved.
July
Found a duplex in Church Hill area of Richmond, VA and decided to go for it. I closed on July 27th. Finally got something achieved, so this year was not a complete waste.
Advertised price - $125 K
Offer Made - $77K
Counter Offer - $105K (Counteroffer accepted by buyer)
Appraisal came at - $124K
Property is performing well - minus some tenant headaches of getting paid on time. Note to self. Not to accept inherited tenants anymore. Accept the property vacant, and put your own tenants even if it means not getting rent payments right away.
Miscellaneous Expenses include - Lawn mowing and Insurance. Had some court costs as I had to file eviction suits against both the tenants. Once the suits were filed, they started paying right on time without any fuss. Amazing what a little bit of show of strength can do.
Utility bills - Paying Electric for 1 unit and water for the entire duplex. (Changing this soon, and the tenant will start bearing electric bill for a small discount in rent)
Deferred maintenance - Only cosmetic. Roof will have to be replaced in another 5 yrs or so. It's about 20 yrs old.
August - November
Dealing with tenant issues from the sale of the Duplex. It has been somewhat of an emotional roller-coaster ride. But looks like worst is behind us.
December
Did some soul searching and decided which direction do I want to go. I cannot see myself doing real estate full time, but I do want to increase my portfolio to create long term wealth. I do have a well paying corporate job with full benefits. Just because so and so says, he wants to flush his job down the toilet doesn't mean that's the best suited strategy for me.
Most importantly, this year, in 2017, I was able to answer 3 very important questions.. Who Am I...? Where am I going? What am I going to do when I get there...
In 2018, I have decided to take my real estate out of state. Currently I am in talks with various Turnkey Providers to work with for OOS investing. I am also in talks with another gentleman I found on BP, who works with other investors in one of the hot markets, allowing them to keep more equity than any TK provider. So basically, I am exploring various options..
How was your 2017? What are you planning to do in 2018?.
Off to a great 2018...
Dilly, dilly..