from newbie to 5 SFR properties in 1 year

[Jimmy Martz]

Hello BP, 

After listening to podcast 167 with Kevin Wood, I am posting of my successes for my first year of investing.  I've been reluctant to post because my family has raised me right which means you don't talk about money and you definitely don't brag about it...  Some of you will relate, I'm sure.  

Deal 1   3/1.5/2, 1152 sq ft. built in 1982 in Mustang OK school district.  pd 61k, put 26k into rehab/closing costs/etc.  All in at 87k.  Appraised at 115k.  did a cash-out refinance for 92k.  Currently rented for $1150/month

Deal 2   3/2/2, 2250 Sq ft, built in 1983 in NW OKC.  pd 85k , put 30k into rebab, etc.  All in at 115k.  Appraised for 160k.  did a cash out refinance for 120k.  Currently rented for 1,300/month.  

Deal 3 3/1.5/2 1087 Sq ft, built in 1972 in Yukon Oklahoma, pd 78k, put 11k into rehab, etc. All in at 89k. Appraised for 100k :-( My CMA would have had it around 110k but this happens sometimes. I did overpay for this one; got a little over-confident... It rents for 1,000/month

Deal 4   4/1.5/2 1700 Sq. ft, built in 1966 in Yukon Ok, pd 82,500.  Put $0 into this one because it was move in ready- moved my family into it.  It appraised for 124k in the same condition that I bought it.  We financed it for the purchase price and put it on a fixed 30 year note for 700/month mortgage for us(escrowed insurance & taxes included).   I put a few grand into our previous house and made it a rental for $925 a month(below market but we were marketing it in December so we dropped it a bit to get a good renter).  At some point, the house we moved into will be a rental as well so that will be even better as we see it through as a long play.  

Deal 5   3/1.5/2 1172 sq ft, built 1966 in Yukon OK. Pd 71,500.  Put in 19k.  All-in at 90k  & It appraised for 107k.  Not great but not awful.  We are leaving about 4k into this deal after everything is said and done.  Rented for $950/month.

With any luck, I can get at least 5 more SFR's this year. I have also been researching the in's and out's of multi-family investing and hope to get into that market as soon at the right opportunity presents itself. I am definitely open for advice if anybody thinks I might need to re-evaluate my strategies or has any wisdom to share.

Lastly, many thanks to the BP community, Josh & Brandon for this great resource!  

[Jimmy Martz]

@Lee Haskins  I was doing deal 1 and 2 at roughly the same time. -bought 3 weeks apart.    Same situation with 3 & 4.  I offered on deal 4 the day after I closed on deal 3.  Deal 5 was a few months later.  The funny thing is that after you already have a house under contract, it makes it much easier to put out lower offer prices because there isn't the self-inflicted pressures to find a deal at that point.  

@Tiffany S. I used a HELOC on my primary residence to make cash purchases & financed the rehabs.

@Max Shaw  My end game is to provide income and build something that I can be proud of.  We all play this game called life.  I just want to be good at it.  I'm a teacher(band director) and I love my job.  I'm not necessarily interested in leaving the teaching profession but I am for damn sure not going to sit around and wait for people to vote to give me a raise...  I'll give myself that raise :-)

@DJ Cummins  Long term plans are tough but I plan on continuing to invest.  I would like to enter the multi-family arena when the right opportunity comes along.  In the meantime, if I can buy a house every other month and continue to follow a formula that is working in the meantime, that works too.  

@Rod Joseph  Deal 1- county courtsteps.  Deal 2- a lead through direct marketing(bandit signs) 

Deal 3-MLS, Deal 4- bought through a local auction company, Deal 5- Probate property brought to me by the realtor who sold me deal #3

@James Masotti

1 & 2 -Answered above

3. Deal 1 took about 10 weeks because of 2 things.   

    -I had to learn how to get work done efficiently and manage sub contractors.

    -I was dead set on not failing so I did lots of work myself because I absolutely HAD to make sure my numbers were awesome in order to convince my wife that I wasn't going to bankrupt us.  I'm sure some of you will relate to that one.  

Deal 2 took about 10 weeks as well.  Numerous problems that I had to work through.  When you're new, it seem to take twice as long to trouble shoot problems.  Just part of the learning curve I suppose

Deal 3 took 5 weeks from the closing date until I had a lease agreement signed.  Little higher on the learning curve.  

Deal 4- +- a week but this was our previous residence so there wasn't much that needed to be done.  This issue was trying to find a renter in December which I now realize is a tough time to find good tenants.  

Deal 5  took 6 weeks from closing day to having a lease signed.  

4,5, and 6- We started out doing as much work ourselves as we could which sucks but it taught some good lessons. We use sub contractors for all the skilled work(electrical, plumbing, etc). I have never hired a GC. The further along we went, the less labor we(my wife and I) did ourselves. We didn't do much labor on the last 2 other than some of the make-ready stuff. Hiring sub contractors is tough. I have found some good people through references from other investors that I have met on BP or at the local REIA meetings. I also get references from the contractors themselves. A good plumber is likely to know a good handyman or electrician. You get the idea. I have also hired plenty of bad sub contractors that I will not use again. I now hire out subs to do 1 or 2 small jobs to try them out & see the quality of their work, reliability, etc. before I will give them the opportunity for a big job. I also require my sub contractors to sign a contract that will hold them accountable to a completion date and deduct payment daily if they don't meet the deadlines if it is something that will take more than a day or two.