Closed on first rental property

[Alexander Price]

Hello all. I am excited to announce that I closed on my first property. The means for which I accomplished it was not how I envisioned, but it is done. Firstly I'd like to state that this first property was done using a baby step approach, turnkey. While not the full the process of rehabbing and refinancing like the BRRRR approach, it did offer me a good understanding of the process within my constraints (time being the big one).

I approached this property like I did when I was looking on my own before I discovered turnkey. I found properties I liked with a turnkey company that I was comfortable with. I ran the numbers on my own to compare to their numbers. I asked many questions and researched the neighborhoods using www.city-data.com, crime sites, Google street view, and of course asking questions on BiggerPockets. I made sure to follow my target area, Memphis, with my keywords, which allowed me to discover who could help me online. I also researched the turnkey companies on the BBB, on BiggerPockets and via searches on Google. Phone calls were also helpful as were the many e-mail exchanges.

I now own a nice SFH. It cost $75,000 and after maintenance reserves, vacancy reserves, PM fees and PITI I manage a 12% COC. I am happy with this.

The main things I have learned from this experience are to use inspectors on your home as many times as you need to. This is vital when using a turnkey to ensure there is no deferred maintenance. The other is to get quotes for anything you may need (inspections, insurance, taxes PM fees) ahead of time. My closing costs predictions were close overall, but I found that my insurance prediction was off significantly as was my home inspection cost. I got lucky here that my lender was able to come in way under on their predicted closing costs.

Using a turnkey was a little odd for me at first. After researching Rent to Rewards, which is run by @BertMiller and @HansGuenther, I became very comfortable with paying to have a very easy transaction. The turnkey process through them was seamless; they made many concessions to speed up closing and addressed all my issues quickly. The even managed to negotiate the contractor paying for my inspector to return to the property to verify maintenance was completed. I received the property with no deferred maintenance. This was huge. They never rushed me and even reached out to me personally after the transaction to ensure I was satisfied. Highly recommend these guys.

I’d like to thank the many people on and off BP that helped me accomplish this:

@DavidHutson @DouglasSkipworth @JamesMartin

@DavidHutson gets special credit for meeting me in person and fielding my phone calls, e-mails and text messages on all questions minor and major. Thanks!

I apologize that none of my name links are working. Hopefully credit is received where it is due.