Bought my first rental. Im not satisfied. I want more.

Real Estate Deal Analysis & Advice
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Bought my first rental. Im not satisfied. I want more.

Ken Cooper
Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes

I closed on my first investment property in Indianapolis last month and got my first check a few days ago. Thanks to BP I am now a real estate investor! I got the property through a Turn key company run by a BP member and they were great. There were a few bumps along the road, but the company handled them all well. The problem is it was so easy that the process left me wanting more. I am not saying that I want problems. More that buying Turn key I payed about retail, and I would like to be able to add value to a property and my net worth. I am leaning toward the BRRRR method. However doing that from far away seems like it could easily go wrong. I met some good people through the process and that is a good start. Any advice from those who have gone the BRRRR rout from afar?

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Linda WeygantPro Member
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
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Real Estate Investing - a socially acceptable product that's more addictive than heroin, more expensive than cocaine, and gets you higher than pot.

Well done1

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  • Dan Baker
    Invester/ wellness coach. · Akiruno Shi, Tōkyō-to · Member since 2015 · 100 posts · 9 votes
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    Would love to hear more about this. I'm currently based in Tokyo, and looking into the US Market.
    0Reply
  • Linda WeygantPro Member
    Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
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    Real Estate Investing - a socially acceptable product that's more addictive than heroin, more expensive than cocaine, and gets you higher than pot.

    Well done1

    Podcast Guest on Show #244
    13Reply
  • Jeb Brilliant
    Rental Property Investor · Long Beach, CA · Member since 2015 · 623 posts · 155 votes
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    Congrat @Ken Cooper on your new purchase. I am doing the same thing, I'm from California and investing in Indy. I kind of built a pseudo turnkey deal for myself. I put a team together first then bought something that didn't need any work and already has a renter in it. 

    If you want to chat about how I did it or get referrals to my team I'd be happy to chat. 

    1Reply
  • Paul Burke
    Investor · Sacramento , CA · Member since 2014 · 20 posts · 7 votes
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    Originally posted by @Linda Weygant:

    Real Estate Investing - a socially acceptable product that's more addictive than heroin, more expensive than cocaine, and gets you higher than pot.

    Well done1

    Totally sums up REI!!! I love it!

    1Reply
  • Account Closed
    Registered Nurse (ICU) · San Jose, CA · Member since 2014 · 496 posts · 332 votes
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    Ken Cooper Congratulations. Investing is like marriage and right now you are in the honeymoon stage. In time you will definitely hit some rough patches. How you handle those situations will determine if your marriage is going to last. A good team in place acts as your marriage counselor that can help you overcome those rough patches. Hopefully in 10 years you are still happy with your property and didn't divorce it. :) Glad things went well for you. I invest in Indy as well. PM me if you would like to exchange experiences sometime.
    7Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
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    Yay, congrats Ken! We should obviously go take a celebration flight! ;)

    1Reply
  • Mike J.
    Investor · Los Angeles, CA · Member since 2015 · 107 posts · 47 votes
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    @Ken Cooper Congrats on your purchase! Do you mind elaborating on the bumps in the road that you encountered?

    @Ali Boone Hi Ali. Which airport do you fly out of? I'm studying up for my oral/final checkride for my PPL and have been training out of KSMO. Can't wait to get my license! 

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
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    @Ken Coopercongratulations. I too always look forward to the first of the month. As long as the money coming in exceeds the money going out it is great! Talked to another investor earlier this week that just made the plunge into the GA market. Daydreaming is ok...but those that take action will reap the rewards. Good job!

    2Reply
  • Alexander A.
    Investor · Indianapolis, IN · Member since 2015 · 143 posts · 82 votes
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    I bought my first turnkey almost 2 years ago.  Im about to buy my 4th now and I still get giddy about it.   I will be in the "honeymoon" stage until I build enough passive income to quit my day job!   Going to be a great day!

    1Reply
  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
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    BRRRR ???

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  • Simon Gill
    Investor · Los Angeles, CA · Member since 2015 · 56 posts · 7 votes
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    @Ken Cooper

    To help others like myself, can you share your numbers like cash flow, expense (including Property management), rent rate, etc?

    Thanks

    0Reply
  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
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    Originally posted by @Ken Cooper:

    I closed on my first investment property in Indianapolis last month and got my first check a few days ago. Thanks to BP I am now a real estate investor! I got the property through a Turn key company run by a BP member and they were great. There were a few bumps along the road, but the company handled them all well. The problem is it was so easy that the process left me wanting more. I am not saying that I want problems. More that buying Turn key I payed about retail, and I would like to be able to add value to a property and my net worth. I am leaning toward the BRRRR method. However doing that from far away seems like it could easily go wrong. I met some good people through the process and that is a good start. Any advice from those who have gone the BRRRR rout from afar?

     Congratulations Ken!  Best of luck as you keep going and hopefully your experience is exactly what you expected.  Keep us abreast of how quickly you are able to refinance and repeat!  That is almost always the biggest challenge but absolutely doable.  Many investors have used your strategy and at some point they alter that strategy to start accelerated buy down rather than refi.  It is a very powerful way of leveraging your money and building a powerful portfolio.  I'm sure you are going to do great!

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  • Evan Kilbourne
    Consultant · Dana Point, CA · Member since 2015 · 48 posts · 7 votes
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    Congrats @Ken Cooper ! I've been toying with the idea of going with a turnkey myself in the future. Would you mind sending me a DM with the turnkey provider you used and the price range you purchased?

    0Reply
  • Keith Anderson
    Investor · Cambridge, MA · Member since 2014 · 92 posts · 87 votes
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    Originally posted by @Curt Davis:

    BRRRR ???

     This one is an @Brandon Turner neologism:

    • Buy
    • Rehab
    • Rent
    • Refinance
    • Repeat

    Per this article...

      0Reply
    1. Ken Cooper
      OP
      Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes
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      Thank you everyone. I will get numbers and more info when I do not have to type on my phone.
      0Reply
    2. Jon Q.
      Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
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      Originally posted by @Keith Anderson:
      Originally posted by @Curt Davis:

      BRRRR ???

       This one is an @Brandon Turner neologism:

      • Buy
      • Rehab
      • Rent
      • Refinance
      • Repeat

      Per this article...

      Unfortunately Keith... you can only "Repeat" 4 times.  Though they will refi, most lenders will not cash-out refi if you have more than 5 rental properties.  I believe this is a Fannie Mae restriction.

      0Reply
    3. Derrick Craig
      Memphis, TN · Member since 2013 · 969 posts · 524 votes
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      @Ken Cooper

      Congrats this is AWESOME NEWS!!

      1Reply
    4. Ken Cooper
      OP
      Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes
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      @Ali Boone Thanks Ali.  I got a flight for my wife for her birthday with Pontous,  we took 3PD up. Her grandmother had a Cherokee.   

      0Reply
    5. Ken Cooper
      OP
      Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes
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      @Keith Anderson thanks for answering that for me Keith. 

      0Reply
    6. Ken Cooper
      OP
      Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes
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      Ok, so here are the numbers, and some of the obstacles. 

      Purchase price  60,000

      Rent  795 

      PM takes 10%

      After PITI, 10% Capex, and 10% vacancy the property cash flows $216

      Total closing cost ( what I have in) 13,500

      Now, some of the bumps.  The original list/contract price was 62,500.  The appraisal came in at 58,000.  The turn key company contested it and they met in the middle at 60,000.  Great for me as the numbers worked at the original price. 

       Next the tenants. The turn key sent us a clean bill of health on them, but when we googled them the first thing that came up was an arrest for drug possession.  I wrote a forum post about it. Would you rent to these tenants. Not sure how to link to it.  In the end after much advice from BP members we rented to them.  

      Then we found out that they had a pitbull.  They had told the TK company that they had a Terrier.  Thats a bit different.  Our insurance co. wound not give us policy with that type of dog.  The TK company handled it very well. As soon as they found out they went over and asked the tenants to remove the dog from the property, which they promptly did.  Maybe because one of the renters is expecting a baby.  

      @Mike J. @Dan Baker @Simon Gill

      2Reply
    7. Ken Cooper
      OP
      Investor · Redondo Beach, CA · Member since 2013 · 95 posts · 21 votes
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      Thanks @Chris Clothier It was a pleasure to meet and get to ask you questions face to face at the LA meet up a few months ago.  I really appreciate your encouragement.  

      1Reply
    8. Chris ClothierBusiness Member
      Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
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      Originally posted by @Ken Cooper:

      Thanks @Chris Clothier It was a pleasure to meet and get to ask you questions face to face at the LA meet up a few months ago.  I really appreciate your encouragement.  

       I was my pleasure Ken.  I thought you guys had a great group and a couple of really good investors heading that group up.  So glad to hear that you are getting started and trying to make some waves!

      Take care - 

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    9. Sterling WhitePro Member
      Rental Property Investor · Indianapolis, IN · Member since 2014 · 554 posts · 153 votes
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      Awesome @Ken Cooper way to dive right in! Taking massive action!

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      1Reply
    10. Jeff Goedeker
      Rental Property Investor · Whiteland, IN · Member since 2015 · 20 posts · 3 votes
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      @Chris Clothier
      Chris, on this thread you said, "Many investors have used your strategy and at some point they alter that strategy to start accelerated buy down rather than refi. It is a very powerful way of leveraging your money and building a powerful portfolio." Just trying to follow what you meant by accelerated buy down? Maybe I'm just not following the terminology correctly. Could you clarify what you meant by altering the strategy to accelerated buy down. Thanks. Appreciate it.

      You, sent about 9 hours ago

      0Reply
    11. Amanda Keller
      sales · indianapolis, IN · Member since 2014 · 94 posts · 12 votes
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      Congrats to you ! I have a few investment properties in Indy I would love to connect with you. Good luck on your next project.
      0Reply
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