Our story began at the beginning of 2018 when my wife and I decided to invest in real estate. We took 6 months listening to podcast, reading books and got on the bigger pockets forums.
We have good jobs - zero in savings; a little in retirement but we were debt free and we had equity in our house. But, this is what we wanted to do, so we took out a HELOC and was able to get $70K from our primary home! So, it was ON after that.
We didn't do anything fantasy. We decided to go with MLS listings, but we did "drive for dollars", in order to get the experience; and wrote a few letters too. Anyway, we offered on our 1st house, they accepted, we then got the inspection. Well, that's when it fell apart!
The Inspector told us about the missing stove knob and door that was uneven; BUT what he did not do was actually go under the house and see all the wood rot from the bathroom subfloor that created the cracked tile above. But I have a little experience in renovations; so I went into the crawlspace and video/photo all the issues and sent it to the sellers and got credits for repairs. Called the inspector and blasted him as well.
First attempt to Close on the 1st house went sour-The date of closing was delay by a week because everyone threw each other under the bus (Attorney, Agent and Broker), the only one who was ready was the bank! The Second Attempt they were 6 hours late - hence I almost pulled out of the deal to only lose $1300....But I went threw with it anyway, the house was that promising! Well I was suppose to wire the closing fee to the attorney - but the Broker said to bring a certified check, so I did. Well the attorney was a little agitated with that and I blew up on both of them right there and then and told them how incompetent they were. (My first deal by the way)
Summary of 1st house - I closed on Mar 23rd, put approx $12000 into it (gutted bathrooms, wood damage and joist), new cabinets and flooring, plus appliances in a little over 3 mons finally Put it up for rent on July 5th and Rented that week and cash flows $300 mo. Thank God!!!
During this 3 months we bought 2 more houses - One was fairly easy and only put $1500 approx. into it but had some seller issues at the beginning. The neighborhood had a sewer assessment after changing from septic (Reason for the Sale). He thought he could pass that on to the buyer--EEERRRRR!!! I may be new but I'm not stupid.
Negotiations - It was $5000 assessment fee, he wanted $72K for the house, I offered $62000. Seller Counter - $72K and he would pay the Assessment (?) My Offer - $64k and he is liable to pay and a lien was being placed on the property by the city - oops! We ended up at $68000 - he paid assessment- Or me? Hmmm... It was a good price
2nd house up for Rent June 15th and rented in 3weeks with Cash flow - $204 mo. Easy Peasy
House 3 - Same time frame. THIS IS A DOOZY!!!
Foreclosure up for $92k we got it for $80K - new appliances and countertops-$1500
Contract - Fannie Mae took 2 weeks to accept our offer, but our Due Diligence time and Closing had to be extended due to the late acceptance. They refused to extend the time and said we would have to find other means to close on the original date. I battle with my agent, the closing coordinator and the broker. All I wanted was someone to do their JOB!!! The broker and coordinator kept reading back the contract to me after I told them I didn't care what it said and they need to work harder to amend the date. The coordinator was making chewing noises when talking to me and I told her to stop eating, get out of the chair and make phone calls or go to the listing agents office. Well she was distraught after that and quit 2 weeks later.
We finally terminated the contract in the last hour that we could and decided to go to the movies. Once we got back I had a call from my realtor saying that Fannie Mae decided to go through with the extension (scare tactics) and so it was BACK ON!!! Until, the listing agent didn't get the needed signatures on the extension and my lender was having stroke. I once Again had to call the broker and coordinator to get this moving and no one would move.
Well, I don't sit easily and took matters into my own hands; see my agents were saying that the listing agent wouldn't call them back or respond to emails and I asked if they went to the office OR called her Broker in Charge? Well, NO. (The office is literally 1 mile from theirs). PROBLEM with agents ----- NO ETHICS!!!! Yet they go to classes all the time- weird!! So, I decided to call the BIC myself and we talked and I explained the situation and within 20minutes I had the extension signed and 3 phone calls. The Calls were to say that the BIC - I called is some big wig BIC in that area and I said GOOD!!!! At least someone got something done- don't know why they get paid SOOOOO MUCH!!!
3rd House - Rented within a week on market and Cash Flows $202 mon.
ALL 3 houses were rehabbed by me and all on market within the same timeframe. April - July
4th House - Almost didn't close because the Seller thought he could pull one over me and only repaired half of what I asked - OOOPPSS!!! See I learned from my first house and instead of paying an inspector, I decided to inspect the houses myself- I have been in a lot of Crawlspaces-- Call me the the Crawlspace Crusader. We rehabbed the Baths and cosmetics. Closed Dec 18th and rented Mar 6th 2019. Almost dropped the price but it went thru and Cash Flows $200 mon
5th house- Frustrated the crap out of me. Another foreclosure through the VA, This is where my realtor dropped so many balls......
So, he got the termite inspections 2 day late from my DD date. Termite damage on back wall by chimney - Although I did inspect the crawlspace and the main joist fro damage; I didn't look in that area.....I yelled at myself...Also the plumber I use told me that the Main Supply Line to the house was 1/2 in and by code is suppose to be 3/4", like who replumbed the house? Fixed that!!!
The house had new vinyl siding but it covered up rotted T1-11 siding, like literally the nails were attached to air. IDIOTS!!! Anyway the whole Chimney was destroyed and and had to rebuild. Remodeled the baths, painted, new refrigerator and flooring in MBR. Fixed the deck.. I think spent approx $8000 total rehab. We pushed rents and got what we wanted and cash flows $242 mon.
We take out of our rents 25% for all expenses (PM, Cap Ex, Vac and ordinary Exp) then Mort. so the cash flow is actual.
One more mention - The Property Management we use is great but they could not accurately quote rents. I pushed all my rents somewhere $50-75 more than what they suggested and I got it.
I have more stories about these rehabs but I realized it is long already....Sorry, Thanks for reading
