All Forum Posts by: Christian Lautenschleger

@James Kandasamy

I think you hit the nail on the head. For me, the first investment was always going to be about the learning experience. I think I've achieved a lot of that without ever receiving the keys.

And the future capital expenditure is key. From (mis?)communication from my bank, it's going to cost me $10K more than what I originally accounted. I can still afford it, but it will greatly effect how I expand. Instead of having more money in the bank, even if the property won't yield much, I kind of have to start from scratch for property #2 (I know there are other ways to grow than using my own money, but I don't think I'm at that point yet).

Again, I view myself as an entrepreneur first, always thinking ahead. I'd like a little more than a hundred or so per month. I'm looking at potential, and I don't know if this is it.

@Jean Bolger

And that's what I would happen. Real estate is definitely a slow game.

@Brandon Cao

It's not just that, but any other expenses. It's an as-is property and although it is in good condition, I'm not sure how much the repairs would increase value and would probably have a hard time selling it under the current scenario (it's been on the market for ~year).

@Jim Herbst

Yeah, at least this may help someone in the future.

Everyone makes mistakes. Lots of ink has been spilt from the stories of failure from eminent businesspeople.

It's off Broad Street in the SW part of town. It's in a nicer pocket for that part of town. I don't want to discuss housing trends, as that's above my pay grade.

For your last point. How hard is it to walk away? I don't mind losing that earnest money, as what I've learned has above and beyond been paid for from that. I like my agent, and he'd ostensibly lose his payday, but this is business.

@Jean Bolger

Fair enough.

I'm getting it for $63K with 25% down (although originally it was 15%, because it was a primary home, and silly me didn't ask before what constitutes an investment property even though the loan officer knew I'm looking at pure investment properties). Rent is $400 and $425. Market is around $500. (I know, I know....)

I suppose I took too much of a learning angle that I didn't want to have to change tenants or really manage them. I did meet the tenants once. Oh well, lesson learned there.

Good point about the flakiness. I like to keep my options open, and that includes preserving bridges. Although I don't know if I'll ever use this bank again.

@Tim C.

The thing with the rent is that they're long term tenants that really can't afford a higher rent. Because, from what I've been told and have experienced a little of, they are good so I'd take less. However, from learning, I wouldn't have purchased in the first place knowing what I know now (and is probably a contributing factor to why it was on the market for so long.

@Walt Payne

Probably more than what I'd want to mention now. Not egregious, but I'm not going to be making much on it, more like bonus money. I'd use money from my day job to further my REI career, notwithstanding the equity. My concern, now, is that although the building is in pretty solid shape, it's not something I want to repair.

@Chuck Holland

I could probably find an out or two, if I wanted. The biggest thing with that is I don't want to burn bridges before I ever close, or come off as flaky. I suppose that it may be acceptable, given the circumstances, but I'm stuck between a rock and a hard place. Apparently the sellers are being feisty as well with their agent, so I could use that to my own advantage if I really want, I suppose.

O-H

@Maximilian Benjamin

Thanks for the advice!

When I think, I think big. I just don't want this to hamper it.

@Michael Olesky

I don't know if I'd call it flailing; rather an "underwriting issue". Today's saga is getting the seller and myself on the same page to close. I want Tuesday morning, they want Monday afternoon. Maybe they'll call the deal off.

@George S

Below, perhaps well below. I (perhaps naively) put good tenants higher than higher paying rent. I viewed this as a learning experience first and foremost. (I didn't say earlier than the mortgage changed to a traditional investment one late in the process; I know that investment properties get 25% down, but that was never mentioned until late in the process. That cost be five-figures, which is more than what I would have agreed to when I went into contract as that ties up waaay too much money for a low-earner.)

What do you mean about the last part -- more on your return after rehab. I'm not talking about rehabbing this property but other ones. This property, even if fully rehabbed, wouldn't go for much more than for what I bought it.

@Brandon Cao

Thanks. I will have some cash flow, but it feels like I'm limited what I can do.

I'm kind of thinking out loud on this post, and have shared it with some people in real life, but none with real estate experience.

My duplex was supposed to close on the 9th, but as of this morning, is still delayed (why, I don't know, but I gave that bank one huge mulligan for a previous mishap and it probably won't be granted another). But it got me thinking about what I want to do moving forward.

I started reading about real estate in the fall, learned A LOT, but eventually needing to get into the game to move forward as everything started going in one ear and out the other from being overwhelmed.

I chose a duplex for the cash flow. Which, since, I've learned I(severely) overestimated. This duplex has good long term tenants, but that's really where the gravy train ends, unless you want to count equity (which I'm not so sure how much I do, because that's money I could use elsewhere to build a business). Cash flow is very low; I traded higher rent for better tenants.

As I've learned more, I've thought more about rehabbing. It takes a higher REI-IQ, but you will earn larger chunks of cash (I have a job, so a rental's cash flow isn't hugely consequential to me anymore). Plus, it seems much more scalable, at least toward the beginning, than buying-and-holding SFHs and multi-units. Scalability is HUGE for me; I view myself more as an entrepreneur than a real estate investor. I would like to branch out into other industries in the future.

Which leads me to regretting my first property already. I know that will probably come off as negative already, but if I could do it over again I wouldn't. I do gain renting, tenant, and landlording experience, but I'd rather hold off until I can afford apartment complexes than small duplexes than won't net any discerning income. However, a huge chunk of my savings will go away into a property that doesn't serve any purpose other than being a learning tool, which I suppose it already has.

I guess you live and learn.