If you recall my most recent article, it was about the first mistake we made in real estate investing. Luckily (or unluckily), it cost us $750. But we certainly learned from our mistake. Losing money is a very good driver to keep us from making the same mistake twice. So, once we wrapped up that minor debacle, we pushed forward and kept up the search for our first investment property in the Fayetteville, NC market.
The Hunt is On!
I spent the following Friday weeding through every app and website that I knew of to find both on and off market properties within our parameters. To say this was time-consuming may be an understatement. Still, I had a goal and didn’t want to let the previous mistake completely derail us. After making a list of all potentials, we both sat down later that night and went through them together. That narrowed our list to 14 properties, which was much more manageable than the original 30ish I had pegged.
With those properties targeted, I sent the list to my agent and set her off to begin contacting listing agents and getting disclosures. We had a trip planned for Sunday, so she had her work cut out for her. Let me preface this by saying that I know this timeline was much too short and have been much more relaxed on subsequent searches.
When Sunday rolled around, she was able to gain the information needed for nine of the properties. Since some of the other properties were foreclosures and bank owned, she was unable to get a response on the weekend.
An Interesting Side Note
There was actually a 10th property on this list, about which my agent was speaking with the listing agent the night prior. It was one of the properties highest up on our list of potentials, so we were very interested. The listing agent told us that there was a lot of interest in this one and that they already had offers on the table. Apparently, the seller was going to make a decision the next day, so if we wanted to be in the running, we would have to put a loose offer on the table.
We decided to throw our hat in the ring, but only under the condition that we would be seeing the property the next day, and if we didn’t like it then, we wouldn’t be submitting a formal offer. Therefore, we offered $4,000 over asking price (as it was priced to sell in the first place, with a good amount of positive equity), $1,000 DD (due diligence), and $500 EM (earnest money).
When our agent arrived at our house the next morning to discuss the route and the order of the properties, she got a call from the listing agent informing us that we weren’t in the running. This meant that they wouldn’t give us the lock box code to even see the property. I told my agent that I still wanted to be able to walk the property just in case the deal fell through—because we all know that happens! The listing agent refused. We were disappointed, but still had nine other properties to see.
So, here’s where the funny part comes in. We are currently looking for our second investment property, and this property just happens to be back on the market. The deal fell through. Go figure!
The Second Time
The listing agent just happened to reach out to my agent a week ago to see if we were still interested. We were, especially because we have the funding for our next deal. But—and here’s the kicker—they had multiple offers again and wanted us to throw our hat back in the ring. Since we weren’t able to get down there any time soon and still hadn’t seen the property, we said no thank you.
Here in NC, once an offer is accepted, you have 24 hours to deliver the DD and EM. But if you recall, we have no intention of doing anything sight unseen again, so that simply wouldn’t work. So, this one was out, unless it still happens to be on the market when we finally make it back down there.
The Third Time
The third twist to this story is that my Fayetteville agent just sent me this property as a potential—YESTERDAY! It is still on the market and has fallen across my lap three times now. This being said, I am starting to wonder if this is a property that we are supposed to own. I suppose only time will tell because I still haven’t been able to see the darned thing.
Related: 3 Reasons You Should Consider a Duplex as Your First Home Purchase
On our trip to Fayetteville, we did run across a few lemons that we had no desire to even walk. The pictures made these potential properties look SO much better than they actually were in reality. Long story short, we narrowed it down to two properties and started negotiating.
The first property was a 3/1 with a large laundry room that just needed a dishwasher. The second was a 3/1.5 with a fenced-in backyard, a “man cave,” and all appliances, including a washer and dryer. Both properties were being sold by the adult children of widows, and neither had been a rental previously. These are the types of properties that I really like—because, for the most part, they have been loved and taken care of. They usually only need upgrades, but nothing major. This is true most of the time, but there are always exceptions to the rule.
On the first property, they were asking $45,000, so we offered $40,000. They were asking $49,900 for the second property, so we offered $47,500. We felt comfortable offering more on that one because of a few reasons:
- This one was bigger.
- It had an extra half bath.
- This one had all appliances.
- It had a fenced-in yard.
- The assessed property value was much higher.
- The neighborhood seemed nicer.
The very next day, within two minutes of each other, both agents called my agent back and accepted the verbal offers. So, now we were in a pickle. We didn’t have the capital to purchase both properties, so we had to make a list of pros and cons to make a decision.
Ultimately, we settled on the second property because it made the most sense.
Where We Are Now
This one had a fast closing also, but since I had already seen the property, I was much more confident in it. I had walked the property, so I had an idea of some of the things my inspector might find. None of these items turned out to be major. He only found minor things, like the windows being painted shut. I have run across this practice more than once in the elderly community, so I wasn’t surprised. I have fixed this issue already with my trusty box cutter.
Other than the few minor issues, the property was in good shape and basically rent-ready. The man cave could use some updating because the carpet is pretty ugly. But we are hoping to get it rented in its current condition to start with.
Ultimately, we closed on the property on Friday, December 29th. I went down there with two of the kids on Saturday the 30th to fix a few of the minor issues and meet with my property manager. That way, they could take marketing pictures and get it on the market.
It has been on the market since then. We were hoping that it would be rented by now. But all of the snow that has been going on here in NC has put a crimp in that. We are crossing our fingers that it will be rented by the end of January. Still, only time and Mother Nature will tell.
Now that we have our first investment property, it is time for us to start working on our second. Stay tuned for that adventure!
Where are you on the journey to your first investment property?
Share your struggles and successes below!