First rental acquisition since joining BP

[James Masotti]

So historically I've been terrible at keeping these sort of deal diaries, but I'm hoping the BP community will help keep me honest...and updating. 

Back on February 22 I closed on my first rental property since joining BP and deciding I'm going to get more serious about my real estate investing.

This was an off market property...which I found here from another BP Member, in the Marketplace! So those of you who think it's only the people on the Podcasts who have these kind of things happen to them...you're wrong. If you want to get serious about your real estate investing, I'd strongly suggest you go Pro and set alerts for your market so you can also try to take advantage of these types of opportunities. 

I was definitely nervous on the transaction as it was my first time using private money...and the owner needed to sell fast. I did my initial inspection of the property and things looked to be in pretty solid shape requiring only cosmetic work to be done. I crunched the numbers as best as could from research I have been doing on BP and from reading J Scott's books for the properties I've been looking at to do flips. I called my private money lender and we reviewed the deal...both agreed it made sense and we closed about 10 days later. 

I'm now in the process of brining contractors through the property to get bids and hope that I'm at least close to what I planned for the repairs to be...which have already gone up quite a bit more than my original estimates. 

I'll provide more details in a future post, as I have some work to do for my W2 tonight...but wanted to get this started so that BP can keep me honest and keeping this updated throughout the process for others to be able to learn from.

Property is located in Wilmington, Delaware

Purchase price $35,000

Original repair estimate $10,000

Current repair estimate $20,000

ARV $90,000

Expected Rent $1150

[Steve Babiak]

When washer and dryer don't fit through doorways, you just have to take off teh door stops and the trim sometimes.  IIRC, had one that only had 24 inch wide doorways where that had to be done.

[James Masotti]

Originally posted by @Steve Babiak:

When washer and dryer don't fit through doorways, you just have to take off teh door stops and the trim sometimes.  IIRC, had one that only had 24 inch wide doorways where that had to be done.

 We actually tried that since I was replacing all of the doors with new prehung 6 panel doors anyway and when we took the measurements with everything off I still couldn't find a washer and dryer that would fit through the opening into the basement.

[James Masotti]

These are the original countertops that had to be yanked out because they were so horribly done by the first contractor.

[James Masotti]

And lastly these are the photos from the actual listing courtesy of @Jessica Stiner

[Caleb Rigby]

@James Masotti, I just read this and while it turned out awesome, I was cringing at almost every sentence along the way. You had to deal with so many issues, it's unfreaking believable. I applaud you for finishing it though. I'm excited to see what else you've been up to. 

[James Masotti]

@Caleb Rigby - I still feel the same way. Not a good first project to convince your wife that this is a viable way to generate long term wealth. 

It's definitely a case study for what other newbie investors should take into consideration for what could happen. I'm fortunate that I had the means to cover the massive budget overruns...although it's completely drained me as I move onto new deals. 

My next project after this one went much smoother with only two much smaller surprises. It will be listed for rent next week. Need to cash out so I can move onto even more in 2017. Big plans for this year!

[Daria B.]

@James Masotti I commend you on sharing your rehab story. I had popcorn after the first act. :-) You did a great job remaining calm under such pressure. You've learned a lot and by chronicling it here will help others along their path. Kudos!

[James Masotti]

Thanks @Daria B. - As much as it sucked...I definitely don't think I would have changed anything because of everything I learned through the process. 

[Niyi Odumosu]

@James Masotti I'm suppperrrrr late but I just read through your posts and it was extremely entertaining. I laughed, I cried, I empathized but all in all it sounds like it was an amazing educational experience and I'm glad you had a happy ending. I am getting ready to start renovations on my first BRRR property located in Philly this Friday so I'm praying I dont have a 1/10th of the issues you had lol Glad to see you were able to persevere and keep smiling through it all!

[James Masotti]

@Niyi Odumosu - Best of luck to you sir! Lots of phenomenal resources here on BP so don't be afraid to leverage them. 

[Katina Clarke]

Wow! I am so grateful for this diary! Thank you!