I've only had one property, and I had it for 5 years and I just sold it a week ago. For me, the thing that was important in the beginning was being able to get my feet wet without too much risk. So, I purchased in a place where the homes were cheap, the property taxes were cheap, where most people rent because they cant afford to buy, and a place that was landlord friendly, meaning that if folks dont pay the rent, they get put out and I mean quick, 90 days. That place for me was Gary Indiana. EEEEEEEEKKKK!
I didn't know a soul in this town which was about 166 round trip miles from my home. I literally drove around for 5 hours up and down each and every block until I found a neighborhood that looked decent. I looked for blocks with manicured lawns, and homes that were cared for, and where nobody was hanging around outside. I found a house. It was a brick bungalow built in 1924. It was beautiful from the outside and I said this is the one. I found a local Realtor and purchased the house for $10,200.
I asked the Realtor to hook me up with someone that could do the work and she did. The guy told me he could get it in working order for about 10K. Well he was a complete flake and I played phone tag with him until I got sick of that and started looking for other people to do the work.
Here is where the Nightmare began. I would call companies and they would say, ooooooooh no, we dont come to Gary. We got robbed two times and my crew was made to lay down on the floor at gun point while they stole all our equipment from our trucks. I was told this several times where people would NOT come to Gary to do the work because it was such a bad area. I knew then that I was in BIG trouble. Not only was I a single female in danger every time I pulled up the the house, but I had no one to help me with this project.
Then, I met an investor who actually grew up on the very block who had about 30 properties in the area. He hired local guys, just guys in the neighborhood with no real skills, just folks who would do the work for pretty cheap. So, he threw me a bone and gave me a couple of his guys to do a few projects in the house. They weren't too bad, and I started meeting people through them that could do other work so I did that until that didnt work anymore. I started asking around and I found a guy in Chicago that committed to doing the rest of the work in the house.
I did some of work myself like restringing the cords in the windows, sanding and staining the window frames and just small stuff like that. It took a year before the house was ready to rent. I spent about 40K total in costs over the 5 year period. I knew the house was worth about 50K, and because I planned to rent it for a few years I would for sure make a profit. I made over 10K a year in rents for 3 years. I took out a boiler system and installed a furnace. The basement was a complete gut job. I built a bedroom and a 1/2 bathroom down there because the upstairs only had 2 bedrooms. I painted, redid floors, installed carpet squares, just nothing really big upstairs was done just mainly cosmetic. Later I had to redo the electrical and I had to redo the insulation in the attic as the tenants were complaining in Winter. The windows were as old as the house, and thank God I got out before having to replace them.
Finding a Renter:
I listed the property on Zillow, and I signed up with smart move for the screening the tenants but I also had about 15 questions I asked each interested party. If they couldnt answer my questions to my liking, they did not get to see the property. I mean why show people the house when they've told me they have pit bulls when I asked what kind of dogs they had. I literally had people tell me I was mean and too strict and blah blah, in one ear out the other. I wanted to make sure I found the right tenant because once they are in there, its hard as hell to get them out. I ended up with a family from Chicago. (Side note) People are getting the heck out of Chicago and moving to Indiana. Anyway, I had a Mom, Dad and 3 kids. The kids were like 5, 14 and one daughter in college so I was lucky to get them. They stayed for 3 years and would still be there if I hadnt wanted to sell and get out. The lady took reeeeally good care of the house, she was Mrs. Clean. The Dad for 3 years paid the rent late as hell, and if I had had a mortgage on the house, and depended on their rent to pay that mortgage, I would have lost the house. He made enough money in one week to pay the rent, but he just didnt know how to manage his money. I put with that for 3 loooooong years and it was a pain. I did charge late fees and they did pay the late fees so at least they did do that.
So, that in a nut shell is my story.
Hope you can learn something from it but one of the biggest challenges I faced was finding people to do the work. If you can get a crew together before you purchase, you will be golden.
Best of luck Newbies.
wow what a story. Hope this doesnt discourage you moving forward. One hell of a learning experience.
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