New investor in Jefferson County, WV

[Joshua Beall]

Hello Everyone!

I'm new to this as a business but "accidentally" wound up with some experience as both a landlord and rehabbing a property, thanks to the combination of the real estate crash last decade, and our tight finances forcing us to purchase a "fixer-upper" when our family grew.

When my wife and I first got married, we bought a small "starter home" in a quiet neighborhood, pretty much at the peak of the real estate market for our area. Real estate values came crashing down, but our family was getting bigger, and we realized that we needed to start looking for a house with a little more space. Being $50,000 upside down on our house, we couldn't afford to sell it, and so we decided to rent it out. And being tight on money, we couldn't afford a home that was "move-in ready."

We bought an old farm house for $135,000, put $60,000 into it, and when we finished (two months after the purchase) we refinanced to get a fixed rate loan (all we could qualify for at the time of purchase was an ARM), and the appraisal came back from that refinance at $225,000. First home was rented out for $200 over the mortgage, we had $30,000 more in equity than we'd put into the second home (the farm house, our current home), and I thought "hmm... this worked out pretty well! Too bad I don't have the time or money to do this again!"

Fast forward several years, I've got a little more time and money, so it's time to try this again, and this time as a real business, not just "by accident." My goal is to start slow and eventually be able to do this full-time.

We've steadily accumulated equity in the property we're in as we've continued to improve it, and the last appraisal we had (October 2012) had a value of $280,000, so I'm hoping to tap into that via a HELOC to fund purchases. Anything we decide to hold and rent we'll refinance to a fixed-rate loan.

So, I've been doing everything I know how to do to educate myself. I've read about a dozen books so far, listened to probably a hundred hours of pod casts and free online training, been reading blogs, and I've been driving around looking for interesting properties. I actually visited one distressed property that's for sale in my area and my wife and wrote up a rehab plan "just for fun" (yes, I really did think it was fun!), but the seller is asking $50k and according to my estimates it needs to be at $25k for there to be $10k in profit left after the rehab. The past month I've been spending my weekends prepping for another appraisal on our property (minor improvements like paint, spreading fresh gravel on the driveway, some minor landscaping, etc.), in the hopes of getting the largest possible HELOC.

So, that's where I'm at. Hopefully I'll at least be in the "made an offer" club before another 60 days pass, and I'd really like to have finished my first flip before the summer is out. You can hold me accountable :-)

  -Josh