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.

Houston, Texas

1 Vote