@Timothy M. The blog commenting was acting strange with me as well a few times. Thanks for your message. I'll explain a bit.
For the first property, we already replaced the floors and redid the bathroom. The roof and AC does need repairing, yes, and we expect to do that in the next year or two. We have money set aside for capex as well as a HELOC and other savings we can use for repairs such as these. This property provided us the HELOC that allowed us to acquire the third one. It also served for major relationships we created that have allowed us to learn a lot and will allow us to continue growing in the future. Although the cash flow will fluctuate greatly depending on if and when we have to do certain repairs, we are well aware of what we need to do before going into a deal. This one still made sense, especially because the appraisal was a good amount higher than what we purchased it for. Once we replace the AC and roof, it will appraise even higher. Some homes in that area in the same condition go for $150k+ with new roof and AC, so we can easily make our money back by doing a refi on it or selling it if we wanted to. You can read more about our experience with this first property here.
Our second property needs a new AC but does not need any other major work. Of course anything can happen along the way, right? We are aware of that. Our third property needs a complete overhaul, which we accounted for at the beginning.
I personally don't see not budgeting for PM an issue, in my case at least. I know I did not say this in my article but I am currently in the process of getting my RE license in the state of Florida. After 2 years of hanging the license I can get the broker license which will allow me to open a PM company to manage other investors' properties. This is a business we are going to start once we are down in Jacksonville and I have my broker license. This being my short term goal for the next few years, I know I will continue to manage my own properties through my PM company. And I did pay a PM to rent out the property. I paid one for the first property when I had the tenant abandon it. The other two still have their own inherited tenants. I have a lease that I am having them renew with through DocuSign to avoid paying a PM the renewal fee. We find ways to cut costs and be efficient as much as possible :) We always have more to learn of course.
These are also properties we plan on holding for 10+ years (as long as it continues to make sense) while acquiring more. If it doesn't cash flow the first year or two, it's perfectly fine. All of the above is specific with our plan and goals. I know it varies with each investor, as it should.
No problem at all! I welcome all feedback and appreciate the great questions and comments!
