Newbie Narrowly Escapes 2 Catastrophes in 1 Year

I bought my first property a year ago. I thought it may be informative for newbies to see what "a year in the life" looks like from another newbie.

First, I bought a 1000 SF townhouse (5 yrs old) as a VA foreclosure. Paid $57K and added another 8K in repairs/maintenance. My out of pocket costs were $25K (mostly due to a premium for taking out a loan of less than $50K--had to pay points and a higher interest rate).

In my prep work, it appeared the unit would rent for around $725, so it met the 1% rule, which was my primary criteria. This area has very low vacancy rates, and the townhouse was pretty new, so I did not anticipate much for maintenance or CAPEX in the first several years (but I allowed for it when running my numbers). I also use a property manager, so I included that. As well as taxes and insurance.

The unit actually rented for $825/mo--significantly more than I anticipated. Then in the fall, Hurricane Florence ripped though the area. Many homes and rentals were damaged. I was extremely lucky and only lost a couple shingles. But it still took over 2 months to get someone out to fix the roof.

Due to all the damaged properties, home prices and rents are both escalating. After 8 months, the initial renters gave notice of their intent to vacate. I did not have a single day of vacancy during the turnover. Rents appreciated from $825 to $975/month--$250/mo more than my original projection one year ago.

I have had a couple small electrical and plumbing repairs, but nothing significant so far. Although I did get a big scare the other night. My property manager called to say the HVAC went out. He sent out an HVAC tech. But before the service call, the tenant checked the panel, and a flipped breaker was the issue.

So in the end, I was blessed with a a pretty good first year, although I did escape major repairs from a hurricane and an HVAC replacement. I do have sufficient reserves on hand, and those close calls, had they gone the other way, show why it is so important to have cash available.

I would like to thank Bigger Pockets and all the people in the forums who have interacted with me. I am learning a lot and ready move out and buy some more properties.