Brooklyn, NY · Member since 2015 · 84 posts · 94 votes
When I learned earlier this year that I was pregnant with my second child I considered putting off my goal (AGAIN!) of buying my first property. Where would I find the time? My W-2 job had me working 60-80 hrs/wk and I already had a two year old to chase around in my "free" time. I'm so glad I didn't let these excuses stop me from continuing to educate myself on REI, analyzing deals and finally pulling the trigger because today my son turns one month old AND I just got the keys to my first property!
The property is set of fully occupied duplexes located in Abilene, TX. Each unit is a 2bd/1ba. I'm thrilled to have my first deal under my belt!
@Alex Gaw The first step was to consume as much content as I could. I read books, attended webinars, listened to podcasts, etc. It quickly became obvious to me that buy and hold made the most sense for me because what I want is cash flow to supplement and eventually replace my income. Then it's really just a process of working backwards. Figure out what your goal is and how you can break it up into manageable steps. I found it really helpful to set clear actionable deadlines (like analyze 10 deals a week, reach out to 4 lenders by May 1, etc.). Once you get started feel free to PM to chat in further detail. Good luck on your real estate journey!
@Rony Mueller As far as estimating rental incomes, your agent should be able to send you a list of MLS rentals for comps and you should also check craigslist and local property manager websites. they key is to find out how people in your target area are finding rentals and then it's easy to just check those sources to see how others are pricing their properties. Once I had a property management team onboard, I would do my own due diligence but I could also send them a listing and ask them for rough numbers.
Thanks for the reply, @Okeoma M.! I'm definitely going to do all of that. I just watched a webinar, in fact, and will commit to analyzing three deals in the next 24 hours to get my feet wet. I guess I phrased my original question poorly; what I meant was how long was it for you between starting to educate yourself and completing your first deal?
@Alex Gaw Ooops sorry! About a year from when I started getting serious about REI to when I closed my first deal. I decided on my 30th birthday last October that I needed to get more serious about chasing financial independence and that's when I started really reading and learning about real estate as an option for chasing that dream. The reason it took a year was primarily because it took some time to get our finances together and we were specifically targeting a summer purchase because our target tenants are students and we wanted to have the place in time to do any rehab and hit the prime Aug/Sept moving dates.
Congrats Okeoma Looks like a great 1st property - your due diligence seems to have paid off
Questoin for you. what is youir plan for handling inhherited tenants . you mentioned they were long term. Are you going to have thm go through a screenign process when they re-up their lease ? did you get a copy of their origial tanant application from teh previous landlord ?
my next step is going to be purchasing a small MF and one of my worries would be what to do with bad inherited tenants .
I Also like how you broke your actions into progresssive steps . Brandon would be proud
ken
@Okeoma M. congrats on your first deal! I too just completed my first investment property purchase (duplex in TX) after spending about 2 years researching, reading, looking at neighborhoods, etc. Always a good feeling to get the first one under your belt!
@Kenneth Hynes Great question: Yes I did review the initial applications but I'm also working closely with my property management company to keep an eye out for any warning signs that any of the inherited tenants are going to be trouble. Assuming rent comes in on time and they continue to take decent care of the property, I don't plan to make them reapply, however if that is not the case then I would rescreen each of the tenants. This would also have the added benefit of allowing me increase rents to current market rates. Since I've already budgeted a rehab of each unit at the end of each lease, so my primary concern is that rent payments are being made on time and without issue. From our numerous encounters with the tenants they seem like nice enough people but I suppose only time will tell if they are nice enough tenants.
@Okeoma M.Thanks for asking for more details. I connected with this thread because of the 'no excuses' theme. I was a successful analyst working for Yahoo for several years until I was confined to a wheelchair a few years ago. Instead of using that as an excuse, I decided to start looking into another dream of starting a real estate investing business. I moved from Cali back to my hometown in Springtown, TX and started saving my pennies (the savings of living expenses alone allowed me to save quickly). I, too, have a great family support network so I found an agent and a loan officer. Once I found a property that I liked (which was two story... quite a challenge for being in a wheelchair), I toured the downstairs while my uncle (the electrician), my parents, and family friend contractor viewed the rest. I wanted to find a newer property because I wanted low risk for my first property. This was a 2005 duplex about 7 miles from me. I am about to close in a week and while I didn't get the best deal, I got a decent deal given my criteria (newer multifamily close to home).
Here are the highlights:
Asking price: $190k Final price: $165k
Gross Rents: $1,655/mo
Maint/Exp/Ins/Tax/Vac: $1,120/mo
Net Operating Income: $495/mo
With a cap rate of 8.1% and cash on cash rate of 12% it is not the best deal, but I had to start somewhere and I have used this as a huge learning experience. I will be managing this property myself so the learning experience continues!
Anyone have suggested reading/advice for land lording?
@Carol Kohn That is fantastic! Congratulations on getting a deal that works for you. I look forward to hearing more about your experiences as a landlord.