Recap 2018 - Success, Failures and Future...

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Howdy folks,

We are only few days away from the end of the year 2018. I am sure it has been a roller coaster ride with market ups and downs due to happening in our country and around the world.  Oil is down so much and we are seeing 2014 gas prices. Interest rate has gone up and back down to 4.5%+ which is still not bad rate.  Over all real estate market was good and especially Houston market experienced good gain in home sales compared to last year after Harvey 2017.  Investors did see lots of great deals all around Houston area and sure many of you have grabbed few deals and made the run. 

It has been decent year for us. We just completed one year of our brokerage and hired 5 agents which was my goal. I have flipped 4 SFH properties and 5th one didn't go well as planned so we moved as rental property. We have gone from 2 rentals to 7 SFH rentals this year which we really felt good about it. We plan to keep at it and reach our 10 SFH goal next year with our other goals of getting vacation rental and starting to invest in commercial little bit.

We have learned a lot and every days it's been great learning experience. We learnt what to do and not to do in flips, we have learn how to get better at our renting process. We have learn not rush with getting on rehab by finding whoever we can and find the right person for the project. We believe learning is always should be part of the process and I will continue to learn and practice and get good at it. 

What are your success and failures and 2019 goals? Share and celebrate even if it's just one deal. 

Updated about 2 years ago

Happy Holidays and Happy New year BP Investors!!

This year, specifically the last 6 months, I did more transactions than the last two years. 

My goal this year was to hit 1k units which I did then hit $1m/month rent roll which I fell just shy of (hit $955k as my best). 

2019 will likely be less about buying addditioanl property and more about taking a breather. Staffing up. Cleaning what what we’ve got. And working on perm debt for our stable properties. 

This year was my first year as an investor.  I began the year with the sole purpose of learning as much as I possibly could which is what led me to Bigger Pockets.  I have read a number of books, listened to many podcasts, talked to other investors and attended a few seminars.  

Towards the end of the year I successfully got two properties under contract but one fell through.   The biggest lesson I learned is when you find a investor that says they want to buy a off market deal from you, it would be in your best interest to get the earnest money immediately. In the deal that feel through I was wholesaling a property to a investor who said they were interested in buying, then when it came time to close they disappeared on me.

I am looking forward to greeting my first BURRR done within the first quarter of next year. 

Thanks to @Vijaianand Thirunageswaram we were able to pick up our first buy and hold rental property in Q4 of this year. Next year I'm hoping to purchase the second in the first half of 2019. But what I would really like to do is either flip or buy for purposes of a BRRR. So I will let the deal determine the strategy. I'm open to a few approaches.

Happy near year all and best of luck in 2019.

First year to think about real estate investing. Thought about out of state but ultimately decided to keep it local. Had a set style for prospecting single family rentals but a bit of mission drift got me side tracked. Went under contract for higher than I was comfortable with but backed out during the option period due to second thoughts about the foundation and the financial commitment. Put out several feeler offers but ultimately found one and now under contract.

First year investor, bought 1 house renovated it and put a renter in it after i put it on the market for a little over a month and it didn't sell.  Still reno'ing my second house should be done in feb, already have 2 people in line to rent it so thats great.  closed on some land about a month ago and everything is rolling with the bank to build 2 houses, so first year is great, hope to keep the momentum up.  I also have a full time job and my bus partner and i do about 95% of the renovation work.

Heres to a good progressive 2019

Hi @Vijaianand Thirunageswaram and Happy New Year!  Well, given that it's already 21 days in and I saved your message when you posted it you might be able to tell life has been busy.

As you probably recall, last year I made the transition from single to multi-family. The prior year I was on track to acquire 10 SFH's, when I made the decision to change direction in order to scale more quickly. In March of 2018 we sold our portfolio to a single investor and 1031'd into a 20-unit apartment complex, which we closed in August.

As Yoda says, "Win or learn, no failures there are" (I might have made that up).  In 2018, one of our "learnings" came when a deal we had worked on for a couple months went south and we terminated the contract.  It was discouraging, but it was great practice for our next deal that we ultimately closed on in Aug 2018.

Fall of 2018 was like drinking from a fire hose as we had to quickly learn the ropes on this new property.  It's been a heck of a project....complete repositioning when I thought I was getting into a "modest value-add"....another learning.  

My only goal for 2019 is to make this property a success and get it stabilized!  We plan to have all of the interior renovations complete by the end of March.  Exterior capital improvements are complete, except for a laundry facility we are planning to add.  Should have this done in Q1.  Big focus right now is filling vacancies.  I'm pleased that we were able to fill 3 units during December given the slow time of year. But we are turning up the marketing engines to keep driving occupancy so we can keep up the pace on renovations.

@Tony Castronovo   Great progress!  If you don't mind the question, how did the sale of the entire portfolio come about?  And where is the apartment complex?  How are the number shaking out for you from what you forecast, at least in terms of your updates/repairs?

Best of luck!

@Tony Castronovo Good to hear from you sir! yes, I totally remember our conversation from last year. I am glad things are slowly getting back on track. I hope you will stabilize and make it out of it because of persistence...  Thanks for sharing.

Hi @Mark S. The sale of my SFH portfolio was to have the money to get into a my MF deal. I wouldn't have been able to keep the houses and still get into a 20-unit. I could have pulled money out via a refi, but I would have had to settle for a smaller deal. I could have partnered or raised the capital, but wasn't ready to go down that path just yet.

The apartment complex is located in Bryan / College Station.

It's difficult to give you a solid answer on the numbers.  We don't have a lot of expenses right now because we are renovating the property.  Mostly just lawn care, pest control, and utilities for vacant units.  I expect that to change once we stabilize.

My rehab costs are higher than originally projected...shocker, right?  I'm about 20-25% over...but a few comments on that:

  • Had to build my contractor rolodex again as most of my Houston contractors didn't want to travel that far.  Starting over on your relationships means you don't always get the best pricing.
  • Although I do feel really good about the price I am paying for the value I am receiving.  I have a construction background and have also done a number of rehabs.  So I know what repairs cost.  The contractors I have used are great.  I am also leveraging them for repairs/issues with existing tenants that cannot wait until the rehab....and they generally take care of the property and watch over a lot of things.  Above and beyond what I would expect from a general contractor.
  • As investors we see things through rose-colored glasses.  There were a few corners I didn't want to cut once I got into the renovations.  And some unexpected costs (e.g. had to replace a lot of doors I didn't think about).