Uneasy Start with a house in 2 counties

[Scott J Sawyer]

As most everyone in the BP community, I started with a love and infatuation with real estate. An early career try as a real estate agent didn't pan out well in my early 20's. When I was in my late 30's I started to get serious and bought about every guru course out there, until I realized that's all I was doing was courses and no actual investing!

So I went out on faith and got my first property. WIN! I could hardly contain my excitement, as I officially embarked on my flipper journey. I can say I didn't do a great job managing the contractor and was probably pushed around more than I should have been the one pushing. Some things were left not quite the way I wanted, but I had a buyer before we even finished. My first under contract in under 30 days! WIN! I purchased the home for $55,000, planned on $20,000 rehab and resell for $110,000. Using a hard money loan and a "gap" lender, that would leave me with $10,000 profit. Didn't matter how small - I had my first flip! Then the appraisal came in .... how was I $20,000 off? LOSE! Well it seems my unique home sat directly on the county line, literally through the living room. There was a sign at the start of the property showing county change, but really? The appraiser wouldn't use the comps I had planned on from the upcoming expanding growth county, he used the lower, more destitute county comps because that's where front door was.

I didn't want to try to market for 30 - 60 days looking for another buyer, paying 2 or even 3 mortgage payments, cutting deeper into already losing cause. I took the offer and was excited that I had gained more knowledge in real world experience. Always the eternal optimist. 

Moral of the story I guess, is you can't do too much due diligence, don't be blinded by your eagerness to get started, no question is stupid unless not asked, and for goodness sake, know your property lines!