All Forum Posts by: Aaron Rouser

Excellent book list! I've read quite of few of those myself and they've been a big help toward my buying our first property. As @Dave E. said, the best learning begins when you can apply what you've learned through buying that first property. It's a steep learning curve after that but the best way to begin is to dive right in. All the best to you!

Hello BP community!

My wife and I bought our first investment property back in June in Saint Paul, MN. 

The residence is a two story 2BD/1BA with a single stall car garage. It has 1050 square feet of finished living space with an unfinished basement that could add an additional 500 square feet. Our plan for this property is to add a bedroom in the basement and a 3/4 bathroom on the first floor. After we fix it up, we'd rent this out, cash-out refinance, and move on to a MF House-hack. The plan is to become SMEs in the Saint Paul market by building out a substantial portfolio here before moving on from this area. 

Some numbers for the house:

PP: $165K

10% down + closing costs: $22K (Conventional mortgage for the remaining $148K)

Rehab estimate: $30K

ARV: $220-$230K

Mortgage/Taxes/Interest: $1K 

Rent estimate (3BD/2BA): $2,100

Some of our mistakes and obstacles along the way:

• Our handyman was truly terrible. Over-promised & under-delivered, provided us with an unachievable timeline for repairs, cut corners along the way, knew nothing about bringing a rental property up to Saint Paul code, damaged our property beyond his scope of work, charged us a premium to have teenagers assist him with the majority of his work....I'll stop here. We cut him loose early, but not before we paid him $11K of our hard earned money, he made off with some of our tools and equipment, and about $2-3K in damages to our property.

• We underestimated our rehab. We're about $25K in now with a framed out basement only. We anticipate needing at least another $10-20K to get the rest of the work finished, and this includes redoing the bad job of the previous handyman as well as labor/materials for adding a bathroom.
• Overall lack of specific knowledge of Saint Paul building codes. We learn more and more each day, but the more we learn tends to add another $1,000 to our rehab budget.
• We'd like to be start pulling together our financing for our next purchase of a MF, ideally a 3-4unit property. Our rehab budget has set us back quite a bit are we aren't 100% confident on how much we can pull out when we refi. (Looking through BP resources and forums now on financing and they've been amazing!)

Questions to guide us as we move forward:

1. When you first began, what tools did you use to accurately estimate your rehab costs?
2. When entering a new market, how did you grapple with having your rental property comply with the  numerous building codes of your city?
3. For those who have, how have you financed multiple deals in the same year?
4. How did you go about finding qualified contractors when you entered a new market?
5. What other numbers/estimates should we have considered before buying this property?
6. Any other wisdom or thoughts in general that I haven't specified, please feel free to comment below.

Excited to keep moving forward with this project, I'll be sure to post updates, challenges and triumphs in relevant threads. I appreciate any and all comments, tips, tricks and wisdom that you're kind enough to share!

Hello BP Community! 

My wife and I have taken the plunge and have started our part-time REI journey in the twin cities! We did so because we are interested in achieving financial freedom and growing generational wealth through real estate and decided that 2021 is the year that we will finally begin!

We bought a SF residence in June that we are currently living in and fixing up with the intention of renting out  this upcoming spring. From there, we plan on MF residence house hacking until we achieve financial freedom!

We have made a BOOK of mistakes and missteps in these past two months. While embarrassing, costly, and humiliating to say the least, we acknowledge that we are new to this process and have so much to learn as we move forward in our REI career. Excited to meet and network with all of you and provide value and service however we can!

My wife and I were in the same position two years ago. Before buying your first home, getting your personal finances into a stable position is extremely important, but even more so when dealing with dangerous CC debt. I fell behind on payments for years because of the variable APR I was being charged each month, and seeing my account balance peak at ~$19K was disheartening. I too wanted to dive into REI, but I'd rather wait another year or two than start while the poor decisions of my excessive CC spending could impact my success. We pinched pennies and managed to pay off the debt in 6 months! 1.5years later we bought our first house!

You should be extremely proud of the savings you've amassed so far! If I were in your shoes, I would use that money to pay off your CC before transitioning to REI. Trust me, you will feel so much better for it in hindsight!