All Forum Posts by: Laura H.

Thanks, @Isiah Ferguson!

@John Thedford - Thanks! I'm ready for #2, but I'm going to take my time to find another great deal.

@Quoc Tran - Hmm... Good point. At the moment I'm interested in getting folks in there ASAP since rehab was so far behind schedule. The first unit rented was the "nice" side, so if we were going to get any extra money it would have been on that one. I'll mention it to the property manager, though.

@Brandon Holley - Thanks! I love Lee's Summit - lived there for ten years before moving south.

@Ryan Antista - I learned a lot on this first one. I hear it gets better from here :o) Good luck!

@Scott Harper - Yes, the down payment came from a cash-out refi on another property - a duplex my husband bought before we knew each other. That property is cash flowing (even with the new loan), but not nearly as well as this one.

@Chinmay J. - Thank you! I know other folks can probably get better numbers, but I'm happy with this one :o)

@Rich Kniss - Good to hear from you! Would love to hear how your goals are progressing.

@Holly Hall - Guilty. I wanted to do it all myself, but I started realizing how much time/effort it was going to take, and realized I could get it done MUCH faster by outsourcing. My grandma always told me to put yourself at your highest - do the work that no one else can do and pay people to do everything else you can.

@Chris Benson - Thanks! Looking forward to seeing what you're up to at our next meeting :o)

@Marissa Carroll - I usually have a tendency to under-estimate cost, but in looking at the numbers I came in around $10,000. I still have some things to return, though, and I'll be getting a rebate from my Home Depot purchases.

@Brian Garrett - Thank you! I sure learned a lot.

@Seth Savoy - Thanks! I think my reward is to take a break for a bit and enjoy it - HA!

Next steps are to pay down all credit card debt and student loan debt with an interest rate more than 5%. We should have probably done this before buying the LS duplex, but it was too good of a deal to pass up. By my calculations, we should be able to pay all of that off by August. After that, every spare dollar is going into our REI fund so we can be ready to jump on the next deal. Yahoo!

After joining BP last November, @Brandon Turner hosted a webinar the night before Thanksgiving where he challenged everyone to buy a new rental property within 90 days. At the time I thought, "That's all fine and dandy, but I work full time and have a young family to raise. There's no way I'll have time to do that." Exactly 70 days later I closed on a duplex in an A+ neighborhood (Lee's Summit - a suburb of Kansas City).

I waited to post this story until the rehab was done and at least one side was rented. It took a bit longer than expected, but it's finally there. Now someone else is paying the mortgage for this asset, and I get to just sit back and watch the money roll in :o)

Here are the numbers:

*Note: The Repairs, CapEx, and Vacancy are low (5%). This is because the property already has a newer roof and stucco siding. I also replaced all of the major appliances, a 30-year-old water heater, most of the flooring, and painted the whole interior (including ceilings) during rehab. This is in a very desirable neighborhood, and was only on the market for a few days before we had an approved renter.

Could I have done better? Meh, maybe. Still, I'm pleased with how it turned out.

Some things I did right:

1. Looked at the numbers, not the property, to see if the deal makes sense. Even though I was dead-set against duplexes, BP's Rental Property Calculator showed me that this was a good deal even with the rehab needed. I undervalued the rent ($725/side) and was very pleased when my property manager said we could get $875/side!
2. Joined my local REI group ($99/yr) and got 20% off paint at Home Depot. That alone saved me hundreds. I also shopped sales, scratch-n-dent, and package deals for appliances.
3. Found ways to cut corners financially - bought materials from the Habitat for Humanity store, resurfaced damaged/ugly countertops instead of replacing them (Miracle Method), called in favors from handy friends to save on installation/repair, etc.

Some things I would have done differently:

1. Use a short-term lender (hard/private money). We refinanced another property to come up with the money for this one, and now I realize we could have done a BRRRR instead. Still considering doing a cash-out refinance after the loan has seasoned a bit...
2. Expect everything will take twice as long as I think it should. I was hoping to have both sides rent-ready by March 1st (one month after closing). Everyone was backed up - from handymen to carpet to painters. It took until March 30th to have just one side rent-ready.
3. Work on your business, not in your business. My original plan was to do most of the rehab work and manage the property myself. The further we got into the rehab, the more I realized my time was better spent coordinating these things rather than doing them.

I have to say that in-person networking was key for this. The BP community is an excellent resource, but rubbing elbows with more experienced REI folks was really invaluable.

So no more excuses - Get out there, meet people, and make some deals!

Yum! Love Bates City BBQ. Welcome!

The home course is a recording of a 3-day seminar. The benefit you have from going to the live seminar is that you can see Gene's properties first-hand, ask questions, network, etc. However, be prepared for a pretty significant (but completely optional) up-sell at the end.

Before thinking about getting into this business, consider your "Why." Is it a cause near and dear to your heart or just a way to escape the rat race? There's lots of up-front work that needs to be done and you may not be in the black for 3-6 months after you open the doors. If you're not the type of person to be in things for the long haul, this may not be for you.

Before diving in, do as much research as possible. Read books, listen to podcasts, attend BP webinars, go to a local REI meeting or two... BUT don't get stuck in the "analysis paralysis" trap - at some point, commit to making your move.

You'll make mistakes along the way, but that's all part of it. What matters most is the lesson you learn from those mistakes and how fast you can bounce back from them.

Welcome, @Clint Looper! I'm also a buy-and-hold investor here KC.

Where are you looking to invest? KCMO? Northland? JoCo? Are you looking for SFH or multi-family? Answers to those questions might make a difference in who to recommend. And if you don't know yet, that's okay.

Have you joined any of the local REI groups? MAREI, Winvestors, etc. There are meetings several nights a week all over town. There you'll meet experienced, like-minded folks who will have great insight on getting started, partnering, and finding good folks. Check out Meetup.com for suggestions.

@Bryton Smith - We've had the Nixa duplex since 1996, so it was certainly not a short seasoning period. We used NBKC.

That's a good point...

By my guestimates I'm having a hard time coming up with that much cash flow:

$52k@ 5% = $280/mo Payment

Insurance & Taxes: $150/mo (total guess here...)

Low est of 5% each for Vac/Maint/CAPEX = $90

$280 + $150 + $90 = $520

$595 - $520 = $75

Even if you take out the $90/mo for Vac/Maint/CAPEX, it's still only $165/mo cashflow.

What am I missing here?

Welcome, @Sean Thompson! I love when I tell folks I'm from the Kansas City area and they go on and on about how boring Kansas is ;o)