Bigger Pockets Success Story: 1 year of learning into ACTION!

[Dominic Lucarelli]

SO.... after reading countless posts, listening to EVERY single BP podcast, joining the amazing Bigger Pockets community, I finally took the leap:

I just closed on my first RENTAL PROPERTY!

1. How I found it - I found it after networking with one of my local REI Groups (Shoutout to Otis DiCerbo!)

2. The numbers - It is a Duplex in the area of Pittsburgh known as Wilmerding. It's a D-class neighborhood sandwiched between Monroeville, North Versailles, and East McKeesport.

Former owner has the downstairs 1-bed unit renting for $400/mo. and the upstairs 2-bed renting for $400/mo. Purchase price: $20,000 Anticipated ROI = (Income: $800*12) - (Expenses: $500 taxes + $245 trash + $700 minor repairs) / $20,000 = 38%

3. Negotiation - He wanted out badly, and it was too good of a deal to pass on. I walked the property twice, had a home inspection, and took the leap!

4. Outcome - I bought it and I'm in the process of setting things up the way *I* want things to run! 

Biggest lesson here is: There are owners who want out of their units. NETWORKING made this deal happen!

[Levi T.]

Originally posted by @Dominic Lucarelli:

@Anthony Angotti

On a longer term horizon, I'm setting aside 60% of income for CapEx/Repairs ($500) to get the building up to MY standards. I've told the tenants I'm willing to honor their old Lease ($400/mo) if they follow my rules. Market rents in the area are $545 and $700 respectively, so I've got some room to grow. Haven't received a cent in rent yet but have documents ready to mail to correct. Word from the previous owner is they are also habitually late on payments. I gave them both a rental application to fill out, neither have done so yet :) Should make it easier to evict them since they are only month-to-month. This is a great learning experience so far. Seriously!

 I do a lot of deals like this. Couple pointers:

Send them your lease, but keep it month to month for now, or at least wait 3 months before signing on a long term lease. You will likely evict 50% of tenants within 12 months for non-payment, or they just up and quit to avoid court. 

I would not hold your breath on them sending your lease back, they are watching you to see if your going to be lazy on late rents, or hit them hard and fast.. do the latter. Notice and certified out the door asap. Once one gets kicked, everyone talks, and starts performing better.

Good luck and congrats on the deal!