My First Rental Property

[Timothy Woolery]

I was in the Army at the time, and knew the importance of stock market investing, but didn't have any knowledge in Real Estate.  I started looking into buying my first house in 2008. The problem was I was still in the Army and stationed in Germany, so it was very hard to get started right away.

I found a partner that was the typical Real Estate Agent, very salesy and kind of sleazy, but he had some knowledge and I needed to have a partner.  I returned from Germany in November of 2010, when the market was just starting to recover.  I was able to find a great deal and bought a duplex off a short sale! This was a great time to buy, because many investors were still very nervous to buy.

I got a great deal, and had a 50% 50% deal. Ultimately the deal was amazing, the property cash flowed over $1K a month and there was no major issues.  I loved receiving the passive income, and doing some extra work on the property was a good stress reliever.  

Things I learned, was how to find deals, and what it takes to own a duplex.  I also learned a lot about who to pick as your partner, and how to set up a partnership.  It's very important to get everything in writing, and to make sure that your partner is not just a salesman, but is someone you can trust.  Nothing really bad happened, and a lot of trouble could have been avoided if we put everything in writing from expectations, to job descriptions.  I did feel like I got sold, but it was an amazing learning opportunity, and now I want to make sure all investors don't feel sold, and everyone I do business with feels like they got a fair deal!  I would rather receive less in each deal, and have my partners feel good, and do more business with me, than get more and not receive another deal.  

The last and most expensive lesson learned, was this: Don't cut corners to save a buck! Every time we bought a cheap appliance, we basically paid for the most high end appliance on the market. It's better to have a rental property with solid appliances, then save $200 on cheap junk, that you will spend $400 in repairs for down the road.  

Overall this property netted me over $40K and was a great learning experience.  I would be happy to talk more about this, and look forward to hearing everyone's first deals!

[Robert McAllister]

The one thing for me... integrity. I want someone who is strong in this area. All else can be learned. Integrity gets immediate trust from me. Thanks for sharing your story!