All Forum Posts by: Mariah Jeffery

I have a full-time job, so fix-and-flip and wholesaling are too time-consuming for me. The only thing I have time to do are analyze deals and buy properties that I turn over to my property manager to manage.

Mack -

I was in your shoes less than 6 months ago. I did have one duplex, but in the 2.5 years after I bought it, I couldn't find any other good deals and was getting very frustrated. Now I have 14 units! The key was being very, very patient and waiting to find good deals. Finally, I met a motivated seller who had 60+ properties and didn't want to list them all of the MLS and flood the local market. Plus, he was scared of his tenants moving out if a bunch of people started looking at the houses and they found out the place was for sale. His only method of advertising was word of mouth, so as you can imagine, he wasn't getting far selling them. I was able to buy 4 properties from him at about 30% below market value, and these properties needed little or no work and had tenants in place!

The amazing thing that happened next is that I bought a property off of the MLS. I noticed a 3-bedroom house listed for $59K, and it's market value is ~$80-$85K. I called the listing agent and asked her why it was priced competitively. She said the landlord lived out of town and was having problems managing and maintaining the property. It needed some cosmetic repairs (new flooring and paint) but nothing major. He needed to sell fast, because he was in danger of foreclosure. I ended up buying the property for $49K and I have a tenant moving in next week at $795/month. Not bad for a single family. I later found out the seller had to bring cash to the closing table. He paid $65K for it in 1998!

The moral of the story is - be patient, stick with the course you're on, and good things will happen. It won't be easy, but it will be worth it in the end.

Good luck!

MJ

I wish my husband would be more involved in our rental business. We both work full time, 45+ hours/week. His dad is our PM, so you'd think he'd be the one who'd talk to his dad most often. Nope. When his dad calls, he hands the phone to me and leaves the room. He at least pretended to be involved in our first couple of deals. Now I do the analysis, decide what to offer, and he says "Whatever you think, honey." I make decisions about when to evict, when to raise rent, and do all of the bookkeeping on my own. Of course, there are advantages to this, but I'd rather have some support. At least that way I can't be solely to blame if it doesn't work out!

I forgot to mention that this is very common in my area. I recently bought two that have multiple structures on one lot, and I know there was at least one more similar sale within the last 6 months, so comps shouldn't be an issue. However, we may run into the issue that there are too many structures on the lot and the property is grandfathered in (since it was built in 1928) and if one burns down, the city would not allow it to be rebuilt.

I'm interested in purchasing a property that is currently rented as a 5-unit. It's got 4 structures on it - a duplex that at one time was rented as a single family, and 3 cabins. It only has 4 gas and electric meters, so I probably would prefer to rent it as a 4-unit when the current tenants move out, since the current landlord is paying all utilities on the duplex/single family. The property is zoned commercial. The county records/tax assessment have it listed as a 4-unit property.

Thanks,
MJ

What did you accomplish?
I bought 4 more properties/11 more units in '09 and laid the groundwork for several more purchases in early '10. I built relationships with prospective sellers, realtors, and contractors. My properties are at between 1.5%-2.2%, not bad for properties that are bought fully rented with little to no rehab needed (i.e., low stress)!

Your best success?
I found a motivated seller. Most importantly, I had patience! I started talking to this seller about buying his triplex in Jan. '06. He wanted $150K, firm. I told him to come back to me when he was ready to deal. He solid it to me in Sept. '09 for $100K. It was worth at least $135K, probably $140K.

Your biggest mistake?
Nothing really stands out. I guess time will tell!

What did you learn?
Where to begin? I learned how to get a feel for whether a seller is motivated or not, to reduce wasted time. I got a system together for bookkeeping, screening, and advertising with 13 units. I learned about the 2% rule and 50% rule from BP. Although I don't follow the 2% rule strictly (since I have a day job and don't have time to do major rehabs, it tends to be unrealistic for me), I still learned to throw the 1% rule out the window because there's not nearly enough profit. Finally, I learned that deals ARE out there if you look hard enough. I bought my first property in March '06 and waited 2.5 years to find a deal good enough to jump on. During this time, I was so discouraged, I thought I simply would never buy another property.

Did you achieve your goals?
My goal at the start of '09 was to finish the year with at least 10 units and at least $1,000/month in passive income, not counting principle paydown. I ended up with 13 units and $1,200/month in rental income, although it would be much higher if I didn't end up having to go with 15 year loans on two properties.

Let's hope 2010 is even more lucrative than 2009 for us all on BP!

You can marry a real estate pro.

13 units/5 properties.

I had 2 units the middle of last year and closed on one property per month for the last 4 months. I should find out any day now if I have 2 more units under contract.