My first Rental/Changing of a Strategy

It’s been over a year since I wrote my first blog on my very first investment property. The first investment was a flip that we worked on for 9 months and did quite well on. This flip got our REI career off the ground. Learned a ton and fell down a couple of times but got back up and ultimately made it to the finish line.

What I guess I find interesting, is how your thoughts on your strategy can change over time. When first getting into the REI world ALL I wanted to do was flip houses. Now seeing the amount of work that goes into the process of flipping and the taxes involved with that, I have started to look at transitioning into the rental (buy and hold) space. It’s not just the work and taxes that has helped to change my mind set, it is also the idea of being able to acquire enough doors over time to give me the ability to find Financial freedom.

My why is extremely easy. Of course, it takes money to make it in this world, but it is not about becoming a multi-millionaire for me. It is about TIME. I know we have all read, heard or have seen things that mention how time is the only thing we can never get back. It’s so true! I want nothing more than to be able to be the master of my daily clock! I have a GR8 job, pays me very well and I truly enjoy doing it. However, the more and more RE that I acquire, the more I start to look at just how long before I am the one controlling my TIME. I am not saying you cannot accomplish attaining financial freedom through flipping, plenty folks on BP do it, very successfully I might add! It’s just that I am starting to see that I am able to acquire more properties in less time through rentals then I am flipping.

I actually found my first rental property when I was working on my flip. I decided not to purchase it at the time because I didn't want to spread my time and money to thin. It’s a good thing I didn't purchase it the first time as waiting a year actually saved me $17K! I found the listing on craigslist. It is a 3/2 1400 sqft with a detached ADU which is a 1/1 556 sqft. When I contacted the owner the first time while working on my flip she was asking $85K. I was extremely interested and really considered buying it the first time and even at the $85K the numbers worked. Luckily, we didn't. As you always hear on BP, RE is all about relationships, it’s true, I was able to let the home owner know that if the home was available when I was finished with the flip I would be interested in purchasing it from her. I did tell her not to hold it for us as I felt that would not be fair, in the event, something came up or went wrong I didn't want to put my name into professional jeopardy.

Luckily it was available after we sold our flip but the nice surprise was for whatever reason she had dropped the asking price by $17K. Anyway, we have since purchased it for $68K. Rehabbed the little guy and are currently renting it out. Found a GR8 tenant. We are in the process of working on the big house now and should (fingers crossed) be done in a couple of months. We will BRRRR this property. When it is all said and done these properties will cash-flow $700.00 a month (after all the P+I, taxes, insurance, capex, vacancy, repairs). So, when I started this journey years ago, I never would have imagined I would become a land lord. I guess it just goes to show you that you need to be able to be flexible and adjust your REI business to align with your overall goals.

Lastly, I just received a call from my RE agent informing me that I got my offer accepted on another deal. This should be an interesting property. It gives me the ability to possibly turn into a duplex and double my cash-flow making it a 2% rule property. More to come on that in another Blog post! Thanks for stopping by.