So I just wanted to tell my story a little here, it's a long one and I have already made mistakes.
This is long, I have a TL:DR at the bottom.
About two months ago I started this journey. I have been wanting to get into REI for about 4 years now, I started in Austin Texas trying to find a home with my VA loan. I was out done on every offer I made by cash buyers, even when I bid over asking. I could have bought a new home but that didn't interest me. I gave up and ended up felting it of the military and took a job that brought me to Utah, and I choose to live in Ogden because I read it was projected to grow and increase in value the most. Seemed like it had potential. Well I lived here a year before I decided to jump in.
I contacted a realtor at Realty Path named Jeff Hardy and he was worth it, he really bulldogged this deal for me. I looked at every multi family in ogden, they were going fast except for one, it had been on the market for about 6 months, and I found out why, these sellers were stubborn and uncooperative. Asking was 205k, I made an offer of 196k seller pays closing, requested some repairs with the intention to have a counter, and then say I'll do the repairs if they accept the lower offer I made. Sellers got pissed and said they weren't going to counter. My realtor told then I was serious, and asked them to reconsider countering, wick they did at 200k and I pay closing and they make no repairs. I countered at 205k and they pay closing and make repairs required by my VA appraisal. It was countered that I pay 206k and their repairs were not to exceeds 500, but the extra 1000 would also go to repairs so they had a 1500 obligation to repairs. I now had it under contract and this deal looked to be going through.
I locked at a 3.75 interest, using Kim Nutt at Castle and Cooke mortgage, and she helped me a lot through this process. She was very nice and helpful. The VA kept kicking my certificate of eligibility back asking for more paperwork, come to find out when I got out of the military my unit never filed out any of my release paperwork I needed to prove my eligibility, they are in Texas. I called them up and they aid it could take up to a month to do, this was unacceptable to me and I harassed then until they did it, it took two days, but I was coming up to my lock deadline and had to extend. I still got the paperwork and sent it into the VA and they kicked out back again!
Come to find out my old unit filed out everything incorrectly, and I was now approaching my second deadline on my lock extension. After two days, a Monday and Tuesday, if calling my unit, 28 phone calls, I had not received a reply on my voice mails or emails, so on Tuesday I bought a plane ticket and flew to austin. I got in Wednesday at noon, my lock deadline was in seven days, the next Wednesday. I got on base and went to the office in a rage, I got many apologies from them, and they corrected the flub in about 5 minutes. I had to fly down to Austin and yell, but I got it done and my Financials were now set.
Next hurdle. The dammed VA appraiser, and the rediculous sellers. First the appraiser said he could not justify the price... this was scary, but my realtor kicked this problem in the nuts, Sent the guy all kinds of comps (which their weren't many), a market analysis of the area and rents, plus it is right next to the downtown ogden revitalization area, he got the appraiser to agree on its value, phew! The appraiser flagged two items for repair, a broken window, and a back patio with broken concrete that posed a trip hazard that measured 10' x 32'. 320 Sq ft of concrete needed to come out and be replaced. Well after the lock extension the sellers made an adendum that the earnest money be non refundable, I agreed. They also made the 1500 required repairs, but did so based on what the inspector found, and not the appraisal! So they did the window, and various other things, but not the back patio, but had met their monetary obligation and said they were done. So the only thing keeping this from happening was the back patio, if I didn't fix it myself this deal would fall and I would lose my earnest money, and everything I had spent on the inspections. Also everyone was weeks out on being able to replace it. I found a guy named Sione to do it on the Ferriday before my close, which was on a Monday. Thursday night he called me up and said he could not do it because a big project had ran over, and it was going to rain on Saturday... I convinced him with a bit of extra cash, 200 dollars, he agreed but didn't think he would have time to do it. So I went to home depot and rented a jack hammer and started demo. Well at about 3 o clock on Friday Sione and his crew showed up, and I had the patio broken up. Sione was a giant and his crew was strong, they were Hawaiian, and could have done more with a ball peen hammer than I could with the jack hammer! Anyways they got to work, had the concrete truck come, and the patio was peed and curing by 7. They did a wonderful job on the patio!
Monday came, the appraiser approved the work completed, and I closed. Finally owned my first duplex, and it was a real duplex! Not one or these terrible single family conversions that seem to be common in Ogden.
My cap rates aren't the best, but if both units are end I get about 500 a month positive cash flow. I had zero down payment, and a pretty good interest rate. I got all of my Ernest money back, and a two year home warranty. The only money off mine invested is the 2000 for the back patio and my inspections. I wanted to do renovations eventually, but my next fiasco hastened the time line I had in mind.
The previous owner turned off the water almost immediately, I closed on Monday, took ownership on Tuesday, and got beat up at work with things I had to take care of immediately. The tenants were moving out, and the water was shut off on Thursday. Well they loaded up their uhaul and left Friday morning, so Friday I went to the city, proved my ownership, and had the water turned on, I went to the property to tour it for the first time since my first tour when I decided to buy it. The water guy was out front and told me the flow should have stopped by then... I went into unit one to check the taps, everything was fine, I went and penned up unit 2, and I heard a vacuum. I shut the door because I realized the tenants were still there cleaning up! I rang the doorbell and knocked, no answer. So I went in and announced myself, and found out quickly that was not a vacuum I heard, when the tenants moved out they disobedience their washer, and did not shut the water valves because the water was shut off and no water was coming out of them, also I should note the washer and dryer are on the second floor. Just a couple of days owning this property and one of my units is flooded! Thank goodness I had already purchased insurance! So that sane day bear river mutual, my insurance company, had a crew there, and now unit two is demoed, and I am getting new walls and flooring for the price of my 1000 deductible. All day Friday and Saturday I have been working on the property, and boy am I pooped!
TL;DR
I bought my first property! I had to fly to austin texas to get paperwork, struggle with scheduling with contractors and appraisers, probably paid too much add flooded one of the units within a couple of days of ownership, but I am officially a real estate investor and couldn't feal better! I sure has been a tough road though!
