$27,000 Profit on First Deal

My original plan was to buy and keep 2-3 rental properties per year for five years, for cash flow and equity growth. I was determined to find a property (or two) that would need a few cosmetics for a "few" thousand dollars, in a good area, close to home, for a decent price, place decent tenants, and hold. So I started reading tons of articles and a few full-length books, followed the daily postings on the message boards of CREONLINE, subscribed to a few free newsletters, and attended several local REIA meetings. I networked, and developed relationships with lenders, realtors, mentors, title companies, attorneys, other investors, a great accountant, and what I thought were decent contractors and handymen. During this time I searched for foreclosures at low prices, to rehab, as well as properties that were priced higher, but didn't need much work at all. I actually went into 10-15, sometimes 20 properties every weekend, for over two months. Then when the Christmas Holiday season came upon me, I thought that would be the least likely time to strike a deal, so I slowed my pace. And that's when I got one!! Four days before Christmas, for 32K (including only $2K to close), I bought a dump of a duplex, almost an hour away from my home, in a "growing" area. It was built in 1927, a wood frame house with irreversible termite damage, roof leaks, some holes in walls, some rooms without walls, down to the concrete and wood flooring, illegally run electrical wires, leaky plumbing, a non-functional water heater, a completely rusted out shower, faulty appliances, and aside from some decent but dirty upstairs tenants. Downstairs I had acquired a tenant who actually made the infestation of roaches look good. Needless to say, it really didn't fit my plan. BUT at less than 50% under market value, I couldn't resist. I remember feeling fearless and ready! Over 7 ˝ months I put almost $13K into the fix-up, dealt with irresponsible contractors, know-it-all handymen, changing of crews midway, good tenants, terrible tenants, getting rid of tenants (and finding much better tenants), tenants who spoke a language I barely did, creating leases (in two languages), raising rents, getting security deposits, completing the fix up, putting it on the market (FSBO), getting a contract in two days (almost full price), six weeks later having the deal fall through, listing with a realtor, then getting an offer from a buyer I previously showed it to, and FINALLY, closing! This property gave me quite an education. And I got paid for it! Though I know I still have yet A LOT to learn, this experience was priceless and the payoff even better. After ALL my expenses, plus the net after rents I collected, my net profit was $27K! Now, here's the PLUS… During this time I also purchased three other properties that DID fit my original plan, which combined, have cash flowed approximately $700 per month, and have already increased in value. AND I am currently under contracts for four more! All this, and I've maintained my full time job! The best advice I would give to ANYONE is: 1. Create a plan, any type of plan. The plan is what got me going. Though I deviated from it, I got tremendous experience from my deviation, and everything I learned I can now apply toward my original plan, only it seems even easier. And every three months I check my plan and make necessary changes, obviously I've had to. 2. Be persistent! Don't give up! Do research, ask a lot of questions, and build relationships. Nothing this good comes this easy. And it really wasn't that easy. But it was and is really worth it! I'd be happy to give more, specific details, if anyone desires. They can email me at BestProps@aol.com. Though I'm not very active to posting, I am here quite often. Thanks for this wonderful site and ALL that it offers! Denise FL [Return to Menu]