Live Diary of a Rental - How I Find, Buy, Fix, and Get It Rented

[Yinan Q.]

1.0 Introduction

I really enjoy reading other investors' diaries of their stories. I always learn a thing or two from what they did right and what they did wrong. It is also what led to my first diary on BP - I want to share my experience and hopefully other people can learn something and avoid mistakes I made.

It is a story of a rental property. I will cover the entire process of find, acquire, rehab, and rent. I don't legally own the property yet at the time of this writing. So what you will see is live – I will try my best to update the diary as things happen. 

Please leave comments and feedback if you like what I am doing and more importantly, if you see some red flags.

The diary will cover the following topics:

• How I found the deal
• Deal analysis and my plan
• The rehab – finding and managing contractors
• Get it rented

[Yinan Q.]

2.0 How Did I Find the Deal

I have been actively looking for my next purchase for a few months. My main resource was the MLS at first. I was using MLS because it's so convenient and it's where I found my other deals. But things have changed so much from the good days.

Realizing how hard it is to find any good deals on MLS, I started looking at foreclosure auctions. What I found is the competition in the auctions is no less than the MLS. Just to give you an idea, there are at least five foreclosure service companies in my area that I know of. There are anywhere between 20 to 50 properties being auctioned each week. Among those, some get cancelled, some reverted (starting price too high, nobody bids so the bank ends up owning it). Maybe only 50 percent actually get sold on the auction day. You can imagine how fierce the competition is.

At the meantime, I also go to local REI meetups and connect with other investors and wholesalers. The subject property in my diary is from a wholesaler I met. He has many buyers signed up on his buyer list. He has a preferred list of buyers that he contacts first when a deal comes up. If none of his preferred buyers claims it, he will then send the deal to the big list.

You may ask why did I get the deal then? I asked the same question to myself. I think it’s a combination of several factors:

• The subject property is not that attractive to some of the buyers. Many buyers are flipper. There is not enough spread in this house as a flip.
• It’s the holiday season so some investors are traveling or on vacation (yes investors take vacations too).
• I was prepared and reacted quickly. I contacted the wholesaler a few hours after the deal hit the big list. I sent him my proof of fund immediately and toured the property the next day so he knows that I am serious.

In the next post, I will go through the deal analysis in details.