Originally posted by @Shiloh Lundahl:
@Tony Robinson I hope you don’t mind if I share some of my thoughts on this deal after reading through your’s and other people’s posts here. If you would rather not receive a critical analysis, then skip the rest of this post and go onto the next one.
I didn’t see you post any other numbers besides the 100k purchase and the 55k rehab and that you lowered rent a few times to finally get it rented. So it’s going to be difficult to really give as good of feed back as possible. And maybe you are only looking for for people to tell you that you that you did a good job and may not be interested in taking full advantage of the learning that comes from the process of doing. But this is how I see it. You did this on your own, which is good and bad. You learned a lot through this process, but did you learn as much as you possibly could have had you have had an experienced partner helping you though the process?
I may have missed it, but I didn’t see where you posted the monthly cash flow for the property. The pictures of the rehab look great. But did you maximize profit? Did you need to put 55k into the property or could you have put 20k into it and sold it for 180k and taken that 40 - 50k and rolled it into 2 more deals? Or could you have lease optioned the property within a 2 - 3 year period of time charging more rent and getting more monthly cash flow by not needing a property manager and then selling it for higher without the majority of closing costs? It looks like you created a lot of equity. What is the return on that equity? Is keeping this property the best use of the cash that is tied up in the equity ir is there a higher and better use of it?
The reason for me asking these questions is not to criticize you, but it is to get you thinking of other possibilities of creating wealth. Of course this totally depends on the goal that you started out with. If you wanted to be able to get a BRRRR property, not have much money left into the deal, cash flow a little on the property, and build equity and increase net worth at a slow and steady rate, then you did a great job. If your goal is to push yourself into growing as much as you can and expanding yourself into the best real estate investor that you can be, it's going to be difficult to do it this way. You've got to leverage the knowledge and experience of others through either partnerships or relationships with other more experienced investors
I think that you could have made over 100k on this same property within a 3 year period of time with more knowledge and guidance on this property.
Thanks for the detailed response! Total cashflow after PITI, management, vacancy and CapEx is about $150 a month. You posed a lot of great questions Shiloh, and are definitely giving me more to think about for future deals.
I think this deal could've gone a million different ways, but I'm happy with the result because it's given me a foundation to keep moving forward. My goal is rapid expansion, but I wanted to walk before I ran. And I wanted to prove to myself that I could execute this strategy before I scaled up and started taking money from investors. My goal this year is to close on a larger multifamily asset. This SFR was mostly to build my track record and confidence.
