All Forum Posts by: Jessica G.

@Val Porter Awww, thank you! Getting this finished was a great Mother's Day gift.

@Sam B. The "after" photos were taken by a professional real estate photo company here in DFW. That almost-HDR effect is really popular here right now. Pro photos are so cheap ($100 for 25), it doesn't make sense not to get them.

@Jon Klaus THANKS Jon!! That's such high praise coming from you! I am really pleased it turned out so well.

Side note: I'm definitely learning that anyone who thinks real estate investing is "easy money" is waaaaay off base. On the other hand, I already want to do more. Flipping wasn't in our original conservative buy-and-hold plan, but I'm wondering if it might not be something to try.

@Jordan Thibodeau It's not exactly a flip -- we lived here for 6 years (I wish it had looked half this nice back then) then we rented it out for 3 years (our reluctant introduction to landlording/RE investment). We want to focus on other investment properties now, and it's a great time to sell in Dallas, so we decided to rehab it and put it on the market.

We used subcontractors and a handyman I found on Craigslist. I did a lot of research beforehand, and while not all of these were the cheapest quotes, they were carefully chosen. I am anxious to figure out how to get "investor rates" on subs!

Anyway, this is the rough breakdown:

$2,500 for flooring (carpet at $1.20 sf installed, vinyl plank at $2) -- I was told on BP not to use vinyl plank because it would look cheap, but I chose to use it for several reasons that I can go into if you would like, and I'm really happy with the choice. The installers took out the old carpet, leveled and fixed the subfloor, then glued down the planks, and it looks AMAZING. No one would know it's not laminate -- until they spill water on it and it's not ruined. The carpet was by far the best rate I could find on FHA-compliant carpet.

$2,700 for granite -- I could have gotten builder-grade granite and kept the old top-mount sink for $2,200, but decided on exotic granite and a new under-mount sink.

$3,000 for painting -- the foundation is under a lifetime warranty, but the tenants didn't bother to water it, so it had to be adjusted and the walls and ceilings had cracks. Fixing them was the most expensive part of the painting.

$500 for handyman -- this was an insanely good deal.

$2,200 for appliances, fixtures and supplies at Home Depot/Lowes

$100 for electrician (2 hours)

$80 for professional cleaners (2 hours)

$600 to rent/buy staging furniture

We did a lot of the cleaning ourselves, and purchased all our own supplies except the paint and flooring.

@Michael Seeker Thanks!

@Stephen Masek We actually replaced all the old white appliances with new stainless steel ones (except the fridge). The old ones are fine; we'll either sell them, or maybe put them to use in another rental house (which we don't own yet, because we are just starting out)!

Tenants moved out of our first investment house in DFW, which we're selling for a few reasons. The left it dirty and battered. We wanted to turn it over as quickly as we could to reduce holding costs, yet we both have demanding full-time jobs (teacher and mortgage industry) and two little kids (5 and 2).

Despite that, we managed to turn the house over in eight days using our lunch breaks, afternoons, and one weekend to coordinate the project. We are exhausted, but I am so pleasantly surprised by how well we worked together on an intense, stressful project like this. I feel like it bodes well for our futures in RE investment.

Here's what the house looked like on May 1:

And here is what it looks like now, after granite, flooring, paint (walls, trim, ceilings, garage), appliances, light fixtures, and dozens of other small-to-medium fixes.

Edit: Hat tip to @jscott -- I had no idea what color to put on the walls, but I remember reading he uses SW Realist Beige in all his flips, so we used that, too.

Hey guys! Thanks to those of you with nice things to say.

To clarify, I am currently not interested in wraps or anything like that. At this time, I would only buy a sub2 to hold. Also, in this case, I think the seller would be very unhappy if I re-sold the house without paying off his mortgage first.

Here's an update: My husband and I visited OUR new house for the first time this weekend, and the seller left behind a huge amount of nice furniture, audio/visual/comuter equipment, and other goodies. It almost seems like the only thing he made a point of taking was some clothes and his XBoxOne. I'm looking into estate sale services.

There is a lot of background about how I got interested in real estate investing late last year, but the short version is that after three years of being the reluctant landlord of my former home, and reading William Keller's "The Millionaire Real Estate Investor," I decided to try my best to take charge and be aware of good opportunities even with our limited startup funds.

About 10 weeks ago, a guy posted on an Internet forum I read (not BP!) asking if anyone knew of a way to sell a house without having to clean, make any fixes, or basically do anything.

I emailed him to tell him some ideas, and it turned out he lived very close to me in an extremely desirable suburb. His equity was such that he might make a couple thousand dollars on the house after making the effort to fix it up and clean it, and paying real estate agents and other fees, so I could sort of see why he just wanted out.

At first, I was planning to wholesale or bird-dog the house, just as a way to get a gentle introduction into real estate investing.

After getting some advice on BP, though, I realized that if his only option to get out of the house with no work was selling sub2, there was no reason on earth for me to not purchase it myself!

At first, he wasn't interested in doing a sub2, because it didn't feel like the clean break he wanted. I told him more about how it worked (after frantically researching the topic myself) and sent him some resources to read.

After looking into it, he decided that a sub2 would be OK, if we got a thumbs up from a lawyer of his choosing. He gave me the details of his mortgage, and I calculated that the cashflow would be thin, but after a refinance when the LTV reached 75/25, it could be great. I knew from watching Craigslist, MLS, and Zillow that properties in the area rented quickly. Also, I know not to count on appreciation, but for what it's worth, the neighborhood is currently appreciating rapidly.

After that, I made the trip up to his suburb to meet the seller and check out the house. The seller was a nice guy, having a kind of early mid-life crisis. He wanted to quit his job, sell his house, and go on a months-long road trip.

The house is in a great neighborhood, down the street from an exemplary elementary school. The house itself was grimy and cluttered, but it looked like it was in overall good shape.

The seller was still on board with the sub2, so I scheduled an inspection. I was nervous at this point, because I was starting to spend real money ($400) without any contract or assurance that the seller was going to follow through. I got a good feeling from him, though, so I decided to trust him.

The inspection came back with lots of issues, but all of them pretty small. Only a few are necessary to take care of right away.

I was working on convincing my husband at this point, too. He was very nervous about the inspection, as well as the "due on sale" clause, and worried that buying a property sub2 existing financing wasn't legal. Luckily, several of his coworkers are lawyers, so he was able to learn more about it and ease his mind.

It has been pretty difficult to work on this deal right now, because my husband and I both work demanding full-time jobs and we have two little kids. To be present for the inspection, for example, I had to ask another teacher to cover my morning class.

Throughout all this, BP was a huge help to me regarding the idea of sub2 and dealing with the issues that arose from the inspection.

At that point, we just waited on the seller. I reached out to say "hi" every week or so. and reassure him our timeline was flexible. I didn't want to spook him, but I didn't want him to lose interest in the idea and fade away.

About five weeks ago, he emailed me to say had been referred to a real estate lawyer, who said the sub2 was OK. My husband called the lawyer at that point (I had him do it because he knows the mortgage industry much better than I do, and it turned out he and the lawyer had some colleagues in common.)

Dealing with the lawyer was a little frustrating, because he was obviously pretty unfamiliar with sub2s and kept dramatically warning the seller about the potential pitfalls (the mortgage remains in his name, etc.)

Eventually, we worked it out by putting these two clauses in the contract. 1) If we miss one payment, the seller can take the house back. 2) We will refinance into our names within three years.

After the paperwork was finished, we mailed a check for $1,200 to the lawyer and he sent us the paperwork.

After that, we did more waiting for the seller to be ready.

I emailed the seller at the end of April reminding him the paperwork would expire at the end of the month and we'd need to have the docs updated if we didn't sign them before then.

He said he needed another few weeks to get ready. I was getting worried.

Suddenly, a couple of days later, he emailed and said he was ready to go TOMORROW. He had already paid the mortgage and escrow for May, so we were bascially going to get a free month.

My husband has a notary at his office, so we were able to have them meet and do all the paperwork with no fuss or drama.

We have the keys and the seller is going to vacate the house by Friday. (We decided not to do a formal lease; we have enough of a relationship by now that I trust him in a house we technically own for another week.)

We are rehabbing our former home right now, but as soon as we finish working on that house, we'll tackle our beautiful new sub2 and get it on the rental market.

So that's how it happened! And as a lovely bonus, in the 2.5 months since I first contacted him, sales comps in his (our!) neighborhood have gone from about $135K to around $150K.

We are officially looking for another property now, but it's difficult to find something with workable numbers in DFW right now.

I would be very glad to detail the process, which was mostly just a lot of waiting. I'll try to write it up tomorrow.

Four months later, using the wisdom I found here, my husband and I just signed papers on our first investment house. The deal is subject to existing financing, so we are taking over a $114K loan on a house that is easily worth $145K and climbing by the day.

The seller is not someone I knew before joining BP. I randomly ran across a guy who wanted to get out of his house, and because I had been reading here, I was able to see the opportunity.

It took a couple of months to get my husband on board, but now he is as interested and invested as I am. He has worked in the mortgage industry for 15 years, so it's awesome to put his experience to a new use.

Our out-of-pocket costs were $400 for an inspection, and $1,200 to a lawyer. The house needs about $1,000 in work to become rent-ready. (Mostly a deep, deep cleaning). We expect to rent it for over $1,300. Our cash flow will be more when we refinance in a year or two, but it's still positive now (around $100-$200/mo).

We're now looking for No. 2! Thanks, BiggerPockets. I feel so good about the path we're on.

Some more information:

The lease says the tenants must leave the house in the same condition they found it, besides normal wear and tear. There are 1-foot rips in the carpet. They certainly did not find the house that way.

Also -- they had a dog, which is what caused the carpet holes. (It also smells in there, like wet dog. He probably peed on the floor, too.) Re-reading the lease, I see the tenants did not get permission for a dog, notify the PM about the dog, or pay the nonrefundable pet deposit.