Great way to start off the year!

[Aaron Millis]

Hi BP,

It's always nice when you get to click "Real Estate Success Stories" as your Forum Category:)

I would just like to share with the community that I am now an owner of 2 properties, because I just closed my 2nd deal yesterday! This process was about 100 times more stressful/difficult than my first purchase. I purchased my first property about 20 months ago right off the MLS. I bought it for exactly what it was worth and closed in 30 days.. there was no fancy negotiation or value add play. I was simply buying it as a house hack and it worked out well for me, better than I could have anticipated. The property is in Auburn AL, and I was very fortunate because the value on that property has risen by about $45,000 in the last 20 months due to the market getting crazy hot here.

Though I did not have any control over the value add with my property, I did understand how powerful it was and how it gives me a lot more options as far as: selling/HELOC/cash out refi/etc.

So this time around I decided to do value add on purpose rather than hoping to get lucky again.

The property I have just purchased is in the south part of Montgomery AL near Vaughn Meadows. It was a foreclosure that looked like a train wreck in a lot of ways- which turned out to be because it was vandalized. To include to copper wires being stolen from basically everywhere imaginable, the entire ceiling in one of the bedrooms was caved in, and to top it off it looked like there could be foundation issues.

The property was on the market for about 6 months and I imagine its appearance scared off all other would be investors. But I decided to take a closer look.... After a few inspections, a lot of headache with my realtor, and a lot of headache with my lender, and a lottt of headache finding a contractor- I ended up going through with the deal. Maybe on a future post if anyone cares I will elaborate on my realtor/lender/contractor headache because it would be a lottttttttttt of typing haha.

SPECIFICS:

-list price: $75,000

-purchase price: $70,500

-loan type: conventional renovation loan - 5% down payment/have to live the property for a year

-Reno cost: $12,700

-Total price: $83,200

-Cash invested: $9760

Structural engineer inspection $450- Home inspection $350- Earnest money $2,000- down payment $4160 (5% of $83,200) closing costs $2800.

- Appraised value: $124,000!

When I started investing about 20 months ago the only RE knowledge I had was from BiggerPockets. And that is 99% the case today. Anyone reading this that is just starting out and wondering if this site is legit and if you can actually benefit from REI I'm here to tell you it is/ and you can. If you think you need to buy into some "investing course" or pay a coach or mentor you don't. The books, podcasts, and forums on here are GOLD and they cost you next to nothing.

When I started investing I had about 25K to my name saved up from the 4 years I was in the military(lower enlisted). 20 months later I have over $100,000 in equity between my 2 properties and one of them is cash flowing beautifully.

I left a lot out but I'm trying to keep this shorter than my last success post.. so this concludes my success story:)

[Aaron Millis]

@Austin S. Pogue Thanks man!

I'll try to give you the quick(ish) rundown on all headaches I've had from this, hopefully it will help for your future endeavors!

Agent Issues: Basically the agent I was using flew out of town when I found this house and wanted to make an offer. I'm a veryyy impatient person so rather than looking around vetting realtors to see who seemed like they would be a good fit- I just called some random broker and he assigned me a realtor.  I had already found the home so I figured who the agent was didn't really matter because I didn't need him to do much for me... Well for starters he tried to lean me away from pursuing this house, though he didn't really have much reason. He just saw cracks in the wall and a missing ceiling and kind of wrote it off. Also he had 0 experience with fannie mae forclosures so he really didn't know any more than I did about anything. He assured me that I would have 15 days for my inspection period.. he ASSURED me - come to find out when I read the agreement I have 10 days not 15. And when I told him "hey its only 10 days" he was like "Okay sounds good" and acted like he never told me otherwise...

All of that is pretty minor - the huge thing was when he told me that I was in a bidding war with some other person and that my offer had been denied and that I was out of luck because that was my last day to bid...... I was pretty pissed after that and I was just sulking telling my gf that the deal fell apart. But after like 30 minutes of feeling bad for myself I decided to call the listing agent to see wtf had happened. He informed me that I still had until the end of the day to put in my final offer (There probably never was another bidder). So I called my realtor and told him he was wrong again- then he put in my offer- then I got it. So I'm not saying the lesson here is to not trust your realtor- but after that I will forever verify everything for myself because he almost cost me an amazing buy because he's misinformed. - this actually made me decide to get my license, which I'm in the process of now!

Contractor Issues: I had a contractor that I was initially going to do the work for me but he was realllllly bad at communicating. Like I would have to email or text him 5 times to get a response. Eventually he just stopped responding altogether which left me scrambling to find a contractor (2K of earnest money on the line- that I definitely don't want to lose). I found another contractor that seemed decent. Until he took me to a house he was working on. Seemed like he was pretty good because everything looked great as far as I could tell..... Then one of his worked lit up a cigarette right in the middle of the freshly remodeled kitchen that they worked on for an out of state investor! That was enough for me to walk away. After that I literally called over 100 people trying to find a contractor. I eventually found one though, his price was $4,000 higher than my initial guy but he seemed like he was an actual legitimate trustworthy guy. So I went with him, and it worked out great.

Lender Issues: My initial lender didn't have a clue how the construction loan worked. Pretty much every question I asked him he didn't really know the answer to and that just made things difficult to get going. Eventually I just called up the same bank (Renasant Bank) but one town over and asked for someone that knew what the hell they were doing haha. I found a guy who claimed he could help me, and he did. He was a tool to me at first though. I think its because he could tell I'm young.. or maybe that's just how he is I'm not sure. Either way it was very aggravating working with him and on one phone call I kind of snapped on him and told him to stop talking to me like I have no clue what I'm doing. After that things eased up a little but I could tell he was expecting the deal to fall apart due to me being incompetent or something. This one has a happy ending though because he was the one that called me to tell me what the house appraised for ($40K more than I paid). He was stunned on the phone because I think in that moment he finally realized I'm making a nice chunk of change.

The end