Invested before I researched anything!... (Montgomery, TX 77316)

[Thomas Siarski]

Intro
Hey everyone! I am super-excited to get started building my wealth in real estate! I believe I am off to a rocky start though, and I'm seeking some guidance... so here's the rub:

I bought a condo, and then I began my research on 'buy & hold' and rental properties. After my purchase, and during my rehab, I stumbled upon, and read "BRRRR" as well as this community (Bigger Pockets). Definitely the way, wrong-way to go, as I should have researched first.

Condo Purchase
Earlier in the year, I financed a 1976 condo that needed a lot of help (Montgomery, TX 77316). I bought it with the idea of fixing it up myself, with the help of my neighbor, a handy-man. Shortly after finding the property on the Houston-Area-Real Estate App (HAR), I contacted an agent (my co-worker's wife), and I visited the place. After a few phone calls, my agent contacted me and told me I was in a great position! She stated the seller is desperate, and that the selling agent is out-of-area and is not knowledgeable on the area's market. The listing was $213,000, and my agent and I got together and came up with a $185,000 offer. We looked at an identical condo in the area, more up-to-date, fresh paint and flooring, etc., listed at $220,000. That property later sold for $218,000.

The seller accepted our $185,000 offer, and before I knew it, I had a conventional loan: Principal - $129,000 ; $55,500 down payment ; 6.6% rate. Closing costs were $9,000. We closed June 30th, and our first payment was in July.

The Rehab
The condo had a sunken ceiling in a closet due to A/C pan issues, exterior balcony doors were off-kilter, mis-matched bathrooms, clashing colors throughout the condo, and inconsistent flooring. My handyman and I completed several items on the list:

- New Flooring, vinyl throughout
- New Paint, lighter colors
- New toilets, vannities
- New Kitchen countertop -Quartz
- New Fixtures
- New Dishwasher
- New clothes washer & dryer

$15,000 in repairs later, I was $210,000 invested. Comps are $220,000 in the area. I have learned through this podcast, my experience, and my readings, that I will not rehab a property myself again. I also discovered that I hate painting. HATE painting.

Panic
While waiting these long four months for a tenant, my wife got scared, and advised our agent that we would like to list the condo for sale. Our condo is currently listed for sale at $220,000 and for rent at $2,100 monthly; listed as both STR and LTR.

Calculations
During the rehab process, I stumbled across, and read, "BRRRR" (David Greene). That book referred me to this Bigger Pockets community! Through my research, I was enlightened about the 1% rule, ROI, and the 75% ARV rule. In some ways, I accidentally got it right:

6% ROI - if a tenant rents for $2,100
1% Rule  - I purchased the property for $185,000, and $1,850 rent is lower than existing comps; it is likely then, to cashflow positively

75% ARV
I really wish I had known about this before I purchased the property. Researching before you buy is really, really important. Had I done this properly, I would have not paid over $150,000 for this condo.
$220,000 x .75 = $165,000  |  $165,000 - $15,000 renovations = $150,000.

Goals
My goal as a new real estate investor is to, above all else, become more experienced and educated. Since buying this condo, I have read "BRRRR", "The Richest Man in Babylon", "Rich Dad, Poor Dad", and I am currently working on "The Book on Rental Property Investing". I am currently working on putting together my core-four, so I am in search of All-Stars. If my property sells, I will "Buy Right" next time! If I get a tenant, I would really like to refinance and pull out capital, if or when rates decline; then, I will purchase another deal with that capital. All in all, I would like to hold enough properties to have at least $10,000 monthly cashflow. I ultimately would like to hold onto my full-time job as well.

Request for Feedback
My primary question is, is there be anything that I should be doing, so I may improve my chances of finding a tenant? I have posted on CraigsList, Facebook, and other social media. I feel powerless sitting and waiting on someone to respond to the MLS. Should I post it here? Of course, real estate investing is a risk, and I have chosen to undertake this task; I am open, however, to improving my chances and minimalizing risk where possible.

I am eager to learn, and I take any criticism positively, and I require the feedback of my peers to grow. What are any thoughts after reading about my start?

Thanks for any and all feedback. In the meantime, I will be listening to BP podcasts, reading BP articles, and other forum posts. I wanted to get this post out there as early as I could, as any response could be the key for me to stop hemorrhaging money. Education and research is so key in this industry, and I really wish I had found these resources sooner.

[Gustavo Delgado]

One: you can't sell right now or better yet you shouldn't. Your selling cost are going to eat you up and will be in the negative. You need to lease it and price it competitively. Your agent should have provided comps to you on similar rentals in the area. I don't want to armchair quarterback but you paid $185k but you feel you would not have paid more than $150. Thats a huge spread! Did your agent help you with this and advised against paying $185? Anyway, whats done is done. You should lease it, even if you only cash flow a few hundred bucks and save those few bucks because you will likely have other issues that arise once someone is occupying. Bet on the appreciation you should generate and be conscious that your monthly HOA is likely to go up next year, so budget for that. In my opinion, Stay away from Facebook and Craigslist to list your property. Why? in my experience 99% of those leads that reply are usually not working with a realtor, most likely because a realtor will not work with them if they vetted them (evictions, bad credit, unverifiable income, DOGS like a pitbulls ect.) also, how are the pictures on the MLS? did your agent get professional pics or just took pics from a cell phone. All this matters. if you want, DM the #mls number. Im in Houston and us HAR as well and can give you my humble opinion on the listing. Good luck