Hello everyone.
I completed my first deal earlier this year around May, and discovered BP shortly after. I wanted to share the details on how it went, what I did well, and what I could have done better. I've also included a few pictures.
Firstly, I had to go about an hour out of the city where I live since that's where I could afford my first property.
I tried to negotiate with 3 different sellers who were selling condos in the same complex but we could not agree on price and so I moved on. I ended up buying a townhome. It was listed for 99k and I ended up getting it for 94k. It's a 2/2.5 1300sq ft
I partnered with one of my long time college friends in a 50-50 type deal. We have a business together and so I know we work really well together. We ended up putting 20% down and getting a conventional mortgage with a 30 year term at 5.75%. They dinged us on the interest a little because my partner is self-employed and even though he makes 3 times more than I do, the bank still saw that as a risk.
The place was in good condition, the previous owner was a contractor so he kept it in good repair. It did need paint and new flooring in the kitchen as there was a leak in the kitchen that damaged the laminate flooring.
Once the place was purchased, I went ahead and started with the painting and floor replacing. My wife and I did all the work ourselves, as my partner lives about 10 hours away. Painting and flooring cost me about $600 total. I painted every room except the master and the 2 bathrooms upstairs. It took me 2 more days than I had expected but got it done in a decent amount of time, had it cleaned up and ready to rent in about 2 weeks after purchase.
PITI is 531/month and it is currently renting for 995/month. HOA fee is 35/month.
I had the lease agreement, application forms, inspection check list, eviction notices and all other forms ready before I purchased the property which ended up being a great decision!!! I also had my screening criteria ready along with the company I was going to use for screening. As much preparation as possible was done before hand.
Where I did mess up was initial screening of tenants. I invited a ton of tire kickers by poorly doing the initial screening. I had a for rent sign in front and got a ton of calls. Everyone that called and wanted to see the place I scheduled a time without asking them any questions about themselves. Well, I ended up having a solid 90% no-show rate. This is one thing I am going to definitely fix next time I'm in the process of getting a tenant. I've read tons of posts on BP since and it turns out this was a very rookie mistake on my part.
I also made the mistake of kind of rushing through the initial inspection checklist with my tenants. Probably because I was too excited someone was moving in. Next time I'll slow down and make sure everything is 100% inspected.
It didn't make sense to me to have my tenants pay online with some sort of credit card or ACH receiving service so I went with regular personal checks. What I did when my tenants moved in was I gave them a "welcome package" which included instructions on how to turn on utilities, welcomed them to their new home and reminded them late fees are strictly enforced. I also included in this package some starter supplies like dishwashing detergent, hand sanitizer, toilet paper, paper towels, etc. About $25 worth of stuff. I gave them 11 stamped and addressed envelopes so that they could just put the check in the envelope and send it in the mail. That eliminates one set of excuses for late payments.
Below are a couple of pictures. The color is called "bay waves" according to my wife, but according to me it's gray.
