2 units and growing

[Luca Gobbini]

Hey everybody, I am an investor in the Springfield MO area, I bought my first house in 2008, I slowly remodeled it and in 2013 I finally decided to upgrade and buy a larger house. I kept my first unit as rental and for the first year I decided to see how land lording was going to be. I had read several books but finally taking the plunge was sort of intimidating. I had heard horror stories about tenants. So I decided to focus on the screening process and, knock on wood, I have been fortunate so far. So after 1 1/2 years I decided to expand this project and found a short sale that seemed a decent deal, I ran the numbers and luckily I budgeted for the worst case scenario, because, obviously it took me 3 weeks longer to finish the rehab and I had to replace more things that originally thought... but luckily my strategy, plan for the worst and hope for the best paid off. I purchased a 3B/1 1/2 Bath on two levels house for $75,000 with traditional financing, after putting 2 months of my time and $11,000 I was able to rent it for $775/month. I saw other houses in the same neighborhood selling for $90,000 to $100K range, so I believe I already have some equity in this project. I'm an avid reader of BP forums and posts but I haven't tried to work any creative financing strategies. As long as I can find traditional financing options and I'm able to put down at least 20% I am able to get a decent cash flow but either I haven't discovered the right place to look or my area simply doesn't support financing at higher rates. I have been buying houses off the MLS, I have looked at REI group but I don't seem to find anything that would grant any cash flow with a rate much higher than 5%. I self mange my units, which helps. So far it has been a good experience, I tried to follow as much advice as possible on setting rules and put some thoughts on the lease agreement to protect me and my investments. I would like to thank BP and the community for the help.