Closed on my first property last week!

Real Estate Deal Analysis & Advice
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Closed on my first property last week!

Justin Wotring
Rental Property Investor 路 Orange County, CA 路 Member since 2018 路 98 posts 路 138 votes

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Toledo.

Purchase price: $64,500
Cash invested: $19,445

First investment property and it's a duplex! Purchased sight unseen!

What made you interested in investing in this type of deal?

Stable cash-flowing duplex located within a half mile of a university and near where I grew up.

How did you find this deal and how did you negotiate it?

My realtor/property manager passed it along to me after one of his other investor clients stopped communicating with him. I quickly ran the numbers and after some back-and-forth with the seller was able to negotiate the price to $10,400 below asking, plus some seller credits at closing.

How did you finance this deal?

I used the HELOC on my primary residence to fund the down payment and initial repairs.

How did you add value to the deal?

We put together a repair/maintenance list based off of the initial property inspection and tenant requests and prioritized what needed immediate attention. My realtor/property manager already had a team in place to knock out most of the list within the first week!

What was the outcome?

Addressing the immediate repair issues helped set the tone for the type of landlord that I want to be and should build trust and loyalty with the inherited tenants.

Lessons learned? Challenges?

Since I live in California and this property's in Ohio, I am very fortunate to have found an exceptional realtor/property manager who can get things done. Buying a property sight unseen, I feel it's imperative to find someone you can trust, build a relationship, and follow their guidance. The main challenge I encountered was getting over my fear of taking the first steps. In the end, I can't believe how easy everything fell into place.

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Steve K.
Realtor 路 Boulder, CO 路 Member since 2016 路 3k+ posts 路 5k+ votes
6y

Did you have a foundation specialist in to check that foundation? Looks like possible step cracks? Unfortunately I don鈥檛 think this much water inside the basement would be caused by shrubs, it鈥檚 more likely you have a bigger issue. If those are indeed step cracks, and the water is entering through the mortar lines, that would explain the large amount of water and would be an indication of the beginnings of foundation failure unfortunately. This wouldn鈥檛 be caused by a few plants growing on the outside, but rather by a large amount of pressure being exerted on the foundation walls over time, causing them to crack along the points where the blocks are bonded (mortar lines) which are the weakest point and therefore the first points along which the foundation will show signs of failure. Putting drylok on the inside may reduce the amount of water entering in the short term but failing to address the pressure issue on the outside will just make the problem worse over time as the water isn鈥檛 prevented from coming into the wall itself as only the inside is sealed, so it just gets trapped in the wall, further degrading the structural integrity of the wall. I would get a foundation specialist out to assess the issue if you haven鈥檛. Ideally you would have taken this step during the inspection contingency period but I鈥檓 assuming it鈥檚 too late for that now, so keep that in mind for next one I guess. Part of the reason I'd never buy a place sight-unseen but to each his own. Slapping some drylok on the inside, removing some plants and throwing some dirt on the outside may not be an adequate solution, in fact I'd be surprised if it works... possible legit solutions will be to dig up the yard to assess the outside of the foundation wall, and address the pressure issue by back filling around the wall properly, sealing the outside of the foundation wall (not the inside), improving the negative grading issue with more than just adding some loose dirt on top, and adding French drains. Depending on how long that much water has been entering the basement, you鈥檒l want to look at the floor joists and check for mold/rot. If you鈥檙e planning to keep this property as a buy and hold I would address the foundation issue properly before it gets worse and leads to a more expensive repair down the road. Whoever did the walk through/inspection should have informed you of the possibility of foundation issues here and recommended having an expert take a look. 

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  • Danielle Moniz
    Member since 2019 路 4 posts 路 0 votes
    6y

    @Justin Wotring Nice working on my first investment property. Any suggestions and ideas?

    0Reply
  • Jeremy Dalatri
    Member since 2019 路 6 posts 路 0 votes
    6y

    @Justin Wotring

    This is very inspiring. Still waiting on my first deal! Thank you I needed this!

    0Reply
  • Richard Nicolas
    Flipper/Rehabber 路 Fairfax VA (fairfax, va) 路 Member since 2018 路 11 posts 路 1 vote
    6y

    @Justin Wotring

    Congrats man

    0Reply
  • David AdamolekunPro Member
    Member since 2019 路 10 posts 路 1 vote
    6y

    @Justin Wotring

    Congrats. Lived in Toledo for 5yrs. Huge rental market. Working on first property in NC.

    0Reply
  • Iven Stevenson
    Rental Property Investor 路 Oklahoma City, OK 路 Member since 2018 路 34 posts 路 24 votes
    6y

    @Justin Wotring amazing bro

    0Reply
  • Chris Christensen
    Member since 2019 路 12 posts 路 5 votes
    6y

    @Justin Wotring Great start on the renovation! I do agree with Steve K that you should consider getting a foundation expert out to the property within the next few months to check for any major issues and hopefully prevent them before they get out of control. If that much water accumulated in the basement, then there is likely multiple entry points (cracks in the mortar most likely). Please keep us updated. I hope this is a great investment for you!

    0Reply
  • Steven Austin
    Member since 2019 路 4 posts 路 0 votes
    6y

    @Justin Wotring congrats, this is a step I'm trying to make

    0Reply
  • Stacey Vilardi
    Residential Real Estate Broker 路 East Brunswick, NJ 路 Member since 2016 路 24 posts 路 5 votes
    6y

    Congratulations and in to the next. Are you going to bring up ARV and do BRRR if possible.

    0Reply
  • Cody Z.
    Real Estate Agent 路 Belmar, NJ 路 Member since 2017 路 370 posts 路 200 votes
    6y

    @Justin Wotring

    Congrats dude!

    0Reply
  • Shelton Love
    Bellwood, IL 路 Member since 2013 路 54 posts 路 16 votes
    6y

    @Justin Wotring

    Congrats. Much continued success.

    0Reply
  • Account Closed
    Rental Property Investor 路 Brooke Park Drive 路 Member since 2018 路 1k+ posts 路 2k+ votes
    6y

    Dont panic over basement water .. worst case you get a french drain and sump pump installed

    1Reply
  • Daniel MendezPro Member
    Investor 路 Dallas, TX 路 Member since 2018 路 254 posts 路 47 votes
    6y
    Originally posted by @Justin Wotring:

    @Daniel Mendez right here on the forums after asking for referrals! We PM'd and then had a couple phone conversations to ensure our goals aligned.

     Awesome! What about the contractor that did your repairs? Did he/she also come from BP? Or did your Property Manager and/or real estate agent refer you to them?

    0Reply
  • Cole Raiford
    Rental Property Investor 路 Gulfport, MS 路 Member since 2018 路 113 posts 路 133 votes
    6y

    @Justin Wotring great job. Way to take action!

    0Reply
  • Maj Valero
    Real Estate Agent 路 Laguna Hills, CA 路 Member since 2019 路 14 posts 路 8 votes
    6y

    @Justin Wotring CONGRATULATIONS!

    I am also in Orange County. Did you feel it's better to invest out of state? Thinking of looking around in Cali but I'm also thinking of investing out of state. Your post gave me courage! Thank you for sharing. Would love to hear more about your experience from this!

    2Reply
  • Dwayne Drew
    Rental Property Investor 路 Effort, PA 路 Member since 2019 路 3 posts 路 0 votes
    6y

    @Justin Wotring congratulations

    0Reply
  • Cathy Cook
    San Diego, CA 路 Member since 2019 路 1 post 路 1 vote
    6y

    @Justin Wotring

    Congratulations! My goal is to close on my first deal in January! I鈥檝e suffered from analysis paralysis for way too long and it鈥檚 time for action like you鈥檝e taken!

    1Reply
  • Lawrence Morello
    Rental Property Investor 路 Freehold, NJ 路 Member since 2019 路 9 posts 路 3 votes
    6y

    @Justin Wotring great job!!!!

    0Reply
  • Kendra Levy
    Rental Property Investor 路 Denver, CO 路 Member since 2018 路 30 posts 路 11 votes
    6y

    Awesome deal!!!!! 馃憤

    0Reply
  • Erika Alexander
    Member since 2019 路 4 posts 路 4 votes
    6y

    @Justin Wotring - I鈥檓 also in California where it鈥檚 so tough to be an investor. Would you be willing to share your gem of a property manager/realtor鈥檚 name? ;)

    0Reply
  • Lindel Turner
    Investor 路 Jonesboro, AR 路 Member since 2017 路 136 posts 路 79 votes
    6y

    @Justin Wotring

    Drive it like you stole it!

    0Reply
  • Louis D.
    Rental Property Investor 路 95660 路 Member since 2018 路 46 posts 路 17 votes
    6y

    Big congratulations, well done!

    0Reply
  • Isabel Ortiz-Gelder
    Rental Property Investor 路 Los Angeles, CA 路 Member since 2019 路 6 posts 路 2 votes
    6y

    @Justin Wotring Congrats! You made it happen!

    0Reply
  • Todd Kruger
    Flipper/Rehabber 路 Albuquerque, NM 路 Member since 2019 路 61 posts 路 64 votes
    6y

    @Justin Wotring

    Justin, I applaud you for seeing an opportunity and being ready to take action. This sets you apart from most!

    A quality broker is a very valuable member of your team. Great job & best of luck!

    0Reply
  • Tony Kim
    Rental Property Investor 路 Los Angeles 路 Member since 2018 路 844 posts 路 1k+ votes
    6y
    Originally posted by @Justin Wotring:

    Investment Info:

    Small multi-family (2-4 units) buy & hold investment in Toledo.

    Purchase price: $64,500
    Cash invested: $19,445

    First investment property and it's a duplex! Purchased sight unseen!

    What made you interested in investing in this type of deal?

    Stable cash-flowing duplex located within a half mile of a university and near where I grew up.

    How did you find this deal and how did you negotiate it?

    My realtor/property manager passed it along to me after one of his other investor clients stopped communicating with him. I quickly ran the numbers and after some back-and-forth with the seller was able to negotiate the price to $10,400 below asking, plus some seller credits at closing.

    How did you finance this deal?

    I used the HELOC on my primary residence to fund the down payment and initial repairs.

    How did you add value to the deal?

    We put together a repair/maintenance list based off of the initial property inspection and tenant requests and prioritized what needed immediate attention. My realtor/property manager already had a team in place to knock out most of the list within the first week!

    What was the outcome?

    Addressing the immediate repair issues helped set the tone for the type of landlord that I want to be and should build trust and loyalty with the inherited tenants.

    Lessons learned? Challenges?

    Since I live in California and this property's in Ohio, I am very fortunate to have found an exceptional realtor/property manager who can get things done. Buying a property sight unseen, I feel it's imperative to find someone you can trust, build a relationship, and follow their guidance. The main challenge I encountered was getting over my fear of taking the first steps. In the end, I can't believe how easy everything fell into place.

    Congratulations on your purchase! I own a few doors in 43612 myself and I'm looking to continue buying in the same area. The only thing that is slowing me down is the time it takes for financing as banks are backlogged with refis and new loans. Toledo is fantastic for cash flowing properties.....you just got to do a little research to know which areas to avoid. I just closed last month on a fully rehabbed duplex....coc around 20%. Eventually word will get around regarding Toledo and I'm just trying to get as many units as I can under my belt before that time comes.

    1Reply
  • Sterling Chapman
    Rental Property Investor 路 Baton Rouge, LA 路 Member since 2018 路 65 posts 路 76 votes
    6y

    @Justin Wotring love it! Congrats on getting started bro!

    0Reply
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