The first deal...a bad deal

I started out with real estate while on maternity leave for my third son. I started like most people probably do, watching flipping shows on tv. I had nothing better to do while on maternity leave so I binged on all of those shows. The numbers mad sense but there had to be a catch. I started my research online after that and found a "guru" attended the first free online class and was hooked. Of course soon after they started contacting me (and still try to) about their "boot camp". I am glad that I found biggerpockets before paying anything into a boot camp. So anyway after reading a ton on biggerpockets, watching webinars and taking their beginners webinar type course I knew I wanted to jump into the real estate game. I talked to my sister about it and she agreed to partner with me. Fastforward to a year later and I'm trying to get a heloc to use to buy a house at a tax auction. In my area these homes go for VERY cheap prices. I ended up not having enough equity for the loan I wanted. So my bank convinced me to use a overdraft protection line of credit. My sister and I were very excited so we went to the auction and bought a house in a nearby town for 5685 including title and fees, etc. The nightmare began. I had to evict the previous owner's daughter who had been living there and not paying taxes for years. The home was still in the owner's name whom I found out later had died several months before I bought the home. It took about 2 months to get her out after waiting for the deed and doing an eviction etc. Those two months I had to pay the ODP of course. This definitely threw my financials for a loop. Then...I was going to try and get a heloc on that home to finance some fixing up (the house was and is in bad shape)(also my bank loan officer told me to lie and say it was my primary residence of course i didnt know that could get me in trouble so kind of glad that didnt work out). The tax appraisal on the home is 60,000...they appraised it for 17000 and wouldnt give me a loan. So...I rented it out to some friends for very cheap due to the shape of the home. In this area the code enforcer said no c of o was required. The house is livable but in rough shape. They still live there. I had a realtor come appraise it and they said they would sell it for no more than 10-12000. So, i'm not renting to own to my friend for 10,000 at 450 a month. I'm paying the loan still and losing some money but not a ton. The experience was good. But here are some lessons...1. have cash reserves!! this is huge. I'm not saying have 100,000 in the bank but you need something because...well things go wrong. 2. know your home values in the area before you buy anything 3. DO NOT buy sight unseen. 4. Do NOT rent to friends we almost tore apart our friendship but luckily were able to fix it. 5. do not allow pitbulls on the premises (she has 2 and home insurance is not easy to get!!) 6. DO NOT buy single family homes in an area with high taxes it just isnt sensible unless rents are very high. 

so theres my first deal only deal and hopefully worst deal.

And now...I am paying off debts and saving up cash reserves before I buy the next one. I am also moving to a cheaper house to rent until we move to a cheaper state to live in. New York is terrible as far as living expense goes. Ive done more research and am listening to all of the bp podcasts on my way to and from work. I wont let the first deal discourage me. Everyone has bad deals. However I will be better equipped next time.