My mind is racing...I’ve got 6 million ideas on how to best invest the cash I got from the sale of My First Property. Thankfully, I narrowed it down to my (current) top 5 investing strategies:
But, enough of the games... I think you already know what strategy I’m going with...this IS a real estate website after-all. BUY ANOTHER SINGLE FAMILY HOME. So, the strategy has been decided! Time to get to work! This time, I’m not even considering going with a TURNKEY provider. Ideally, I’ll find an off-market deal on my own, from a wholesaler, or something on the MLS through my agent. I’m saying BYE BYE to turnkey. Why? Because buying a property the “turnkey route” is essentially buying a flip at retail price (ie: you’re paying top dollar for a freshly renovated property). Yes, the cash flow numbers may still add up nicely on a turnkey property, but I want to get something with built in equity and improve my return on investment. I'm definitely going to be more selective with properties now that my confidence and experience has built up over the past year. And I don’t mind picking up a property that needs a little rehab work (just, nothing TOO extensive). But first, I had to get pre-approved for a mortgage again. It was a pretty straight-forward process (again) and if you want a refresher on getting pre-approved, you can rewind to when I was acquiring My Second Property HERE. Next up? Actually FINDING the deal. So, I reached out to my network of wholesalers, investor connections, and agents letting them know I was in the market for my next investment. I cast a wide net and gave them the same property criteria as My Second Property: -Between $75k-$100k -Rents for close to $1,000 per month -Single story brick ranch, in a B-Class neighborhood Basically, I'd LOVE to replicate My Second Property. Good numbers, good neighborhood, good bones. Immediately, my agent shoots over a lead. She's quick! LEAD #1 This property is listed at $85,000 and has a tenant lined up to move-in on June 1st at $900 a month. FIRST IMPRESSIONS OF LEAD #1: Curb appeal not the greatest, but I do like the brick siding and that it's a single-story property. The acquisition price lines up with my budget and a tenant is moving in at $900/month, providing immediate cash flow. The downside? A quick google search of the property places it in a neighborhood I'm not a huge fan of. Definitely not a war zone, there are decent houses around, but I don't see a super positive future for the area. Also, I noticed it was purchased for $38,600 just 6 months ago...and with it being listed at $85,000 that's a HUGE increase in half a year. I can't help but think I'm getting a bad deal. I PASS on this one. My agent then scoured 100+ homes, and only 3 popped up around my price range with estimated rents being $1,000+: Checking each neighborhood...NOPE, NOPE, NOPE. Again, they aren't in war zones, but I really am consciously trying to get in GOOD neighborhoods that are stable and have a BRIGHT future. I'm trying to capture a little appreciation too! SO I KEEP LOOKING! Make sure to sign up for Zillow, Trulia, Redfin, and Realtor.com emails and get leads forwarded your way every day. My morning routine: wake up and look at all new inventory on the MLS. Another lead comes to me by way of email. LEAD #2 This property is listed at $95,000 and should rent right around $950 per month. 3 bed/1.5 bath, 1,050 square feet with single car garage. FIRST IMPRESSIONS OF LEAD #2: Curb appeal is pretty decent as the property looks well-maintained. The acquisition price lines up with my budget and rent is close to my goal of $1,000. Interior looks dated, but also seems in great condition. Could be a pretty low-maintenance turnkey rental! Decent neighborhood too...I'd say probably "B" Class. I LIKE IT A LOT! I think it's time to put in an off..... WAIT! ANOTHER LEAD! LEAD #3 This property is also listed at $95,000 and should rent right around $950 per month. 3 bed/1.5 bath, 1,144 square feet and has a single-car garage. Recent updates include: kitchen, bathroom, flooring, paint, HVAC, water heater, windows, trim, and siding. FIRST IMPRESSIONS OF LEAD #3: Probably the best looking property I've seen so far. Best curb appeal, good neighborhood, lots of updates. Big backyard, nice master bedroom with sliding door. Not the biggest place, but I like it. I like it a lot! TIME TO PURSUE! I run the numbers on LEAD #3 and after factoring in all expenses (property taxes, mortgage, insurance, vacancy, maintenance), I definitely can't offer near asking price. So, I'm a little pessimistic. But, if you don't ask, you'll never get. It's all part of the game! Running your numbers, seeing what WORKS FOR YOU, and trying to negotiate with the seller. I submit an offer on LEAD #3 for $82,000. This gives me a little wiggle room to work up, but not a ton. I immediately get a response from the seller: "Thank you for your offer, but you're $13k away from my asking price and I have 4 showings already set up." OK. Not surprised by that response. But, I give this property ONE LAST effort and go back to him with my highest and best. I offer $88,000. My absolute highest. "That might work." Well, I guess he was short and sweet. But, what the hell does that mean?? He needs the weekend to think it over and wait for additional offers. So...I go into a 3-day waiting mode and anxiously wait for the weekend to pass. Monday finally rolls around and....DRUMROLL PLEASE.... The seller accepted an all-cash offer. As in...not mine. Damn. OK. Well, on to the next one. So, I go to my backup property. I re-run the numbers on LEAD #2 and go for it! Now, I'll start by saying: ALWAYS TAKE A LOOK AT DISCLOSURES! Lead #2 checked the box next to having "Hazardous Conditions." It turned out they had mold in the home, but it was treated and they provided a receipt for the treatment, so it wasn't too bad. I offer $82,000 on LEAD #2. Fingers crossed! AAAANNNNNNddddddddd.... *Crickets* Literally, didn't hear back from the selling agent about my offer. Nothing. No response. No counter. LITERALLY NOTHING. WHAT THE HELL! The search for My Third Property is proving to already be frustrating. Beyond frustrating, actually. It's not going to be easy. It hasn't been easy so far. It's tough when you just want to put your money to work, find a great investment, and close on something ASAP. I've got to keep telling myself THERE ARE DEALS OUT THERE, but I just need to be patient. The search continues. Takeaways
-Tyler
0 Comments
Leave a Reply. |
Browse Topics
All
|
Investing |
Jump In |