First brrr property becomes a lesson

[Gail W.]

I have just completed my first deal on a SFH. I own some land but have never had a house before. Here's the way the deal worked, I paid $30000 for a house that was supposed to be partly rehabbed. My budget was for $5000 for rehab. That didnt work out so well I spent $7200. There were a few things that I discovered in the process of rehabbing. One leg was bad in the disconnect and half the breaker panel was dead. Also the water heater leaked, which caused me to not only replace the water heater, but to also replace the brand new floor in the utility room that the previous owner had installed. luckily I was able to complete all the work myself saving labor. The house appraised for $44000 so I am not losing equity on the deal and when I get it rented it will cash flow. I refinanced $30000 leaving $7200 in the deal. With the proceeds from the mortgage I am looking for another property. I dont feel too bad about the deal because I've learned alot so far, more to come I am sure. I feel like I am knowledgeable enough when it comes to the rehab. My question is how do I learn to see the things that are hidden in a casual walk through, or do I just try to allow for those things somehow?

[Angie Shires]

@Gail W. Congratulations on completing your first deal...that's a huge step that a lot of people never complete! 

I've definitely heard worse stories, so certainly don't beat yourself up! If you have the home inspected, you should have a really good indication of what is going to have to be done. Inspections (at least in Texas) cost between $450-500, but can save you a small fortune! 

After you get your inspection done, get your bids for repairs. The bids are free and you'll have a good understanding and be able to better run your numbers! 

How did you purchase, off market, wholesaler, MLS...etc?