-In 2016, my decision to start investing in real estate stemmed from frustration in sending $1,300 a month straight to my landlord. All to SHARE a 3 bed/1 bath house in the San Francisco Bay Area with two roommates.
-Coupling that frustration with the goal of finding passive income streams, real estate became the answer. Why real estate? Because rental property provides consistant monthly income to help support my dream of road-tripping the USA in a van.
-Utilizing the help of a Turnkey Company, I start getting property leads at a very affordable all-in price. Typical properties are available for under $50,000 and newly renovated.
-A hot property lead rolls in! I want it! I want it! But, not so fast. After taking my time to research the property, it gets swooped up right before my eyes. A case of analysis paralysis? Yup.
-Patience is key! Wait for the property that makes sense for you. Got another hot lead that I put under contract right away. Deets: $37,500 acquisition price + $9,000 rehab. Rents for $750. This is THE ONE!
-I line up insurance, title work, and close on the property in December of 2016.
-Let the renovations begin! And it needs some work...roof repair, exterior paint, replace rear siding, new exterior doors, new gutter, soffit and fascia repair, clean and seal basement, electrical repairs and new 100 amp breaker, refinish hardwood floors, new vinyl kitchen floor, new furnace and duct work.
-No renovation project is perfect. We've got delays due to weather. BUT, I eventually start getting some renovation pictures and see progress. Getting closer to a rented property!
-Renovation complete. And it's lookin pretty good! At least for a place that's all-in under $50,000.
-Time to take my first trip out to Indy and meet my connections on the ground. Walked through my property and took some videos.
-Signed an agreement with a property management company to run the place. Charges: $150 lease-up fee, 10% of collected monthly rent. Maintenance services provided at cost of $20 per man hour or at Cost + 10% for outside services. Evictions? $100 fee + court costs. Also, must provide 30 day written notice to terminate Property Management agreement.
-We got a signed lease! It's officially rented! Only took...3 months since acquisition. It's a 12-month lease with rent set at $750 per month. My first rental payment will come through via direct deposit for the amount of $600 ($750-$150 new lease fee). Every month after that I'll receive $675 ($750 - $75 Property Management fee).
-11 straight months of rental income and no maintenance/repairs. Is this too easy?
-BOOM! I'm finally hit with the first real issue in almost a year. And it's a big one. The. Place. Is. Vacant. And I was never informed by my property management company. After getting a tip online from someone on Biggerpockets, I sent out a 3rd party company to assess the situation. To my disbelief, sure enough, there's a lock-box on the front door. Neighbors confirm it is vacant. And best yet? The garage isn't properly secure and there's a squatter in there.
-What's next? Well, I'm working through that right now. My first priority: find a new property management company. What type of company decides not to tell their clients of a vacancy?? Then, I need to put a little money into the place to get it rented ASAP. The condition of it has definitely declined in the past year. Good thing I set $3,000 aside for repairs/maintenance. Always. ALWAYS save 10-15% of your gross rent for issues like this.
- I officially terminate my old property management company and hire a new one. They've been integral in turning this property around. They've driven to the property, taken photos, changed out my locks, secured the garage, and in the next couple days and are preparing a Scope of Work so I can assess repairs needed. Check out my plan for what's next HERE.
-After having my Property Manager provide an estimate on repairs, I list MY FIRST PROPERTY FOR SALE. Why?? I lay out all out HERE in detail.
-With My First Property on the market for three weeks, I finally agree on a sales price with a buyer. My First Property is officially SOLD.