All Forum Posts by: Denny R.

Thanks @Ian Lawson! Honestly, I learned so much from just getting into it and finding my first deal. I wish I would have started taking action sooner instead of coming up with reasons why I couldn't jump into it. So many people never buy their first property, but there really isn't anything to be afraid of if you know you're getting it at a good price. A minimal loss isn't ideal, but I consider it the cost of learning this business.

@John Hutchison No worries! The house is basically worth what I have into it. So basically it's not worth it to refi at this point, but I am just happy I didn't lose my butt on the deal. I'm chalking it up as ok since it was my first deal. 

@Will Kirkendoll I am looking for one as we speak! 

Thanks @Rudy Cecere! Honestly, it would be helpful to have a contractor walk through the house with you if possible. I would also take as many notes as possible while walking through and researching the costs at home. I believe it's another one of those things that gets easier to do as you do more deals.

I can say that it was a big pain in the butt at times, but I learned so much from starting with a house that needed more rehab. Although I don't think there is anything wrong with starting with a house that is turnkey or minimal work as long as the numbers make sense. The biggest challenge is just getting the house and making that first deal happen!

Thanks @Bill E.! I looked around on BP and the internet to find some companies that seemed reputable. I then set up phone call appointments with them and asked around 50 questions. I compiled a list of questions to ask from multiple articles I read here on BP. I made sure each had some sort of property software that documented everything for me (checks, invoices, etc). After the interviews I reviewed their contracts and selected the best one.

The company charges me 1st months rent as a placement fee and 8% per month of RENT COLLECTED. I negotiated that if the tenant is evicted within the first 6 months, they would replace them for free. This gives them incentive to find a solid tenant. They handle the day to day jobs of being a landlord (rent collections, finding a tenant, service calls, legal issues, etc). They do handle repairs at the property, but I authorized repairs without my consent up to $250. Anything over this dollar amount requires my approval. This allows me to get quotes from other companies if I feel what they are charging me is too high. I have yet to have any issues with the company, but I am allowed to break the contract with them at any time if I feel they are not a good fit for me.

Thanks @David Schulwitz! I actually went to school at Saginaw Valley State Univ.! I am very familiar with the Saginaw area.

I had 3 contractors submit bids. I did a walkthrough with the house with them. The contractor was supposed going to handle the whole thing, but I was purchasing the materials so that I could save some money.

Interview/walkthrough: My father was actually in town so he helped me drill them with questions. As the owner of a house building company, he knew a lot of the things to look out for with contractors. We both agreed upon the best guy for the job. I think my approach to this was spot on. Unfortunately, it is very hard to judge a person's work ethic and morals based off of an interview. His work was fine, but he rarely showed up. This is why so many people on BP encourage to get referrals.

I ended up firing my first contractor and finding another one. I was so glad I did.

Payment structure: My father taught me to never pay contractors up front. A lot of them require money to get started so I negotiated minimal amounts and then paid larger chunks as we went along. The first contractor I had only took checks or wire transfers. The second contractor took payment by credit card. He was willing to pay the processing fee as a way to offer protection to his clients. I thought this was very cool.

@Ola Dantis Thanks Ola! I definitely would have considered a flip, but I did not buy it for the right price. I underestimated the amount of work it was going to need. The house is basically worth what I have into it. I am just happy my first SFR rehab didn't put me in the hole lol

@George P. Northgate St

@Donald S. I used one contractor for majority of the work. I did have a handyman do some of the miscellaneous things and another guy install all of the vinyl plank flooring.

I saved a lot of money by purchasing the materials on my own. I used referrals and advice from other investors on where to go for some items. It took a lot of time to do this my first time around, but it will definitely be worth it for future purchases. I was very pleased with the second contractor I found!

@Sherif K. I would say that the house is worth about what I have into it. That was another one of my mistakes. If I would have more precisely estimated my rehab costs, I would have bought at a price that added some additional equity.

At this point I am just going to hold on to this house as it is and see if there is any appreciation over the next couple of years. I have additional money to put into another deal I am looking to purchase another house. Maybe another conventional purchase or find someone to help me fund a BRRRR. I am not quite sure yet to be honest.