Investor In STL - First Deal

[Jason Pride]

Hi BP!

I am a CPA and new investor in St. Louis.  I have done two deals so far, thanks in large part to what I have learned from the podcasts and forums!

The first deal I did was a SFH that I planned on flipping. It was a foreclosure that I bought from a wholesaler. I rehabbed it and applied for an NPA tax credit (credit in some St. Louis neighborhoods that will return 25% of your rehab costs as a MO tax credit that can be either used or sold). Unfortunately, I was not awarded the tax credit, as it is given out on a lottery basis. To make matters worse, there were significant overages on the rehab budget, due to termite damage below one of the floors. After the rehab was completed I reanalyzed what the sale potential was. If I sold the property as a flip, I would have made around 15k at best. I compared this to what the rental cash flow would have been...and it was a very simple decision! Call an audible and hold the property as a rental!

As a rental, I am able to lease the property for $1,100 a month paying a ~$400 mortgage.   The rehab costs were paid for in cash, which I have not refinanced out yet - this is why the cash flow is currently so high.  As is customary in STL with SFHs, the tenant pays all utilities, including water, sewer, trash and lawn care.  This is another factor contributing to the high cash flow it produces.  I plan on waiting to refinance the property until I need to free up cash for another deal! 

I would be happy to meet up with anyone in the St. Louis area who wants to talk real estate.  I have someone who mentors me, which I am extremely grateful for, so I would like to "pay it forward" to any one who would like some help or guidance!  I can not claim to be a full-blown mentor, as I have only done 2 deals and am still learning myself....but I'll try and share what I know as best I can!

Thanks All!