Sleepless, On the Way to 50 Rental Props

I needed an extra 10K and my number one go-to PML couldn't foot it...so I asked the seller. The kicker in that he is using seller financing already and just wants to sell the contract. But he needs cash available to buy another business, I've got a large chunk, just not enough. So I sweetened his pot, and it never hurts to ask! We'll see if we can strike a win/win/win I'd exit with a HELOC. This will be rental number one though. I'm excited to make it work. Tetris pieces are floating.

-Chad.

I love your analogy to Tetris. In some ways, it is exactly like that.

PS - I am glad you are doing a blog. I sense that you are driven and will be a real asset to the REI community. Love your writing style as well.

I slept like a baby after that first post. It just seemed like getting it off my chest helped unwind things.

I'm interested to see how this progresses though. I was talking to a non-real estate business mentor last night, and she didn't quite get it. I'm looking at buying properties that I've never seen, and I want 50 of them. ...It's a hefty goal, but then uninspiring goals provoke uninspiring results. 50. Just need to get this one signed and closed. Management is already forwarding me contracts. Just need the Title holder to catch on

for whatever it's worth; I am not a big proponent of buying scattered property all over the place. I like to build out one city (24 units) before moving on to the next so that I can have a keyperson oversee the area internally. Because of a new found level of energy and experience, I am doing that currently in 3 cities at once that I am most comfortable. (Cincinnati, Orlando, Atlanta)

PS - All property that was accumulated from 2001 until 2010 was disposed of except for a couple of units. Starting fresh with new property that don't have legacy costs attached to them.

I can understand that. I don't particularly want them scattered. I just can't buy in my current town, and a few things have led me to Indianapolis. If I buy this first one, I will likely find 10 more in the area using the same management. For me it's more of a management company search. I'm very comfortably with the companies that I've found in New Orleans, Pittsburgh, and Indianapolis, so I'm going to take advantage of the price difference, most definitely!

But I appreciate the input. There are definite astute risks buying these "blind," which was reinforced to me several times last night as these two partners/mentors went on about it. I'm all about the management though. I passed on my first option in Indianapolis because I couldn't get a good feel for management. Once I was confident with that factor, I was comfortable in the next deal.

So 50 rentals, and maybe only throughout two different cities

I am glad I could help you realize the market potential in Indianapols. Hopefully, we can work on other deals together:) ! Take care and good luck on NY property!

Thanks for blogging. I need to write out my game plan and actually take action. I've learned about what so many others on here, and I'd like to incorporate many of them. I just need to decide and then move forward. I really do like what your plan is. You're idea to find a property management company you like and find rentals that they can manage-brilliant. I think I have that correct. Thanks again

Lenee,
I haven't forgotten you. This one is just a turn-key operation. I'll close on it and be better equipped for some wholesale deals from you!

I canceled the primary residence purchase I was working on for the military transfer, reporting this 01AUG. Thanks for all the feed back on the boards from my other thread about losing the earnest money deposit.

We worked out with the other lawyer and redeemed my deposit, so that is a huge plus! 3K back in the bank to be put to use elsewhere.

Lessons learned from this one:
1.) NEVER rush a real estate deal. It just doesn't make any sense. Two authors that I love to follow ALWAYS refer to their 60-days of due diligence for any major deal they go into contract on. I feel foolish for even entertaining the notion of rushing a 260K purchase. Doing so is literally asking to put you at a disadvantage and forcing you to present all cards at offer. I've brokered enough deals to know that was not prudent, and in all honesty at the end of this deal, I still can't tell you why I acted against sound judgement. I think it was closeted ego...I've have brokered deals between other buyers and sellers but I have never actually OWNED my own. For some reason I let the blind reasoning of "owning = benefits" take over that deal at high costs. ...or maybe I'm a sucker for learning the hard way, but I definitely drove this lesson home!

2.) Every detail in the contract matters! Every detail. I needed to be in this house by 01AUG, close by 27JUL for this deal to make sense. It's why I was motivated. I allowed a contract to go forward with a projected closing On or About 15AUG. It was the usual time frame used by lawyers here for their usual deals...but this was not a usual deal, and everything driving me was contingent on us being in this house before reporting to the new unit. I should have modified that one detail, it almost cost me 3k for the carelessness. Ultimately, we came to terms, and I'm getting it back citing not having mortgage commitment due to a title hang-up of which most involved believes rests with owners fault. Seller didn't have to honor that though, and could have extended that time frame by 45 days. It is part luck, and part mutual understanding about why the deal failed that I'm getting this back.

3.) Lawyers with sound advice, and that relate well with you are worth every honest dollar you pay them, BUT boy do they s l o w things down. Seller and I could have resolved most of this over coffee, but instead there were two layers of middle men involved. ...that annoyed me, but it is also the reason that I had enough time to back myself out of a deal that I knew was bad two weeks after executing contracts, so I'm torn on whether the lawyer buffer is a good thing or bad. It delayed my "dealing," but the buffer checked hastiness.

4.) Small tokens of appreciation goes miles with your real estate agent! I already knew this, since I am one, but it reinforced good behavior. Even though this deal dropped, I knew it was her birthday this month, I sent her a card and a check for $200 for birthday/time. She loved it, and I'm sure it lifted her spirits! It sucks to watch a deal dissolve in front of you; I've been there. $200 is nothing for all of her help on this one, but she thanked me copiously. I'm thrilled I was able to do that for her.

I learned much more, but these are what stick out strongest. I'm embarrassed I got wrapped up in it, and at great piece that I acknowledged the hole I dug, stopped digging, and crawled out

I shouldn't have treated my primary residence any different than I do my investment deals. For some reason I felt like there was a gap because the investment deals I'm looking for are between 10K and 30K and the primary residence was going to run 260K. That was mistake number one, and one I will never repeat again.

In other news, I'm in talks with the Indy seller to pick up Rental Prop number One. With 14K asking, he was willing to accept 5K cash, and sandwich loan a bridge loan of 10K (extra 1k in there for his trouble), while I take over the original seller financing of 21.5. We're working out details, hopefully I'm in contract for Rental #1 by next week! I'm excited about getting this one going and closed. It's a great price, and great cash flow!

Take care,
Chad.

congratulations on starting your journal! it is great to have one to keep you motivated, accountable, and then when you look back, you can see how much you've accomplished!
I am hapy to hear that you were able to get your deposit back-wheew! what a relief for you!
I hope your deal in Indy works out... sounds like it's almost a done deal!

I totally agree with you about showing appreciation to your real estate agent! Those tokens will go a long way! I also send giftcards to my agent-she likes them very much, I'm told

Wishing you success,

Valerie

Hey Chad! Dropping by to say hello. How are things going? Still looking for deals in Indy?

This is great material! My husband and I are just starting out and we are having some anxiety, so to see that other successful people have anxiety too helps the cause. Not that I wish that feeling on anyone. I just hope I can describe it as a rush in the next couple weeks when the deal closes successfully. We just counter offered on our first MLS deal that we planned to assign and we saw at the last minute that our REA didn't put our name and or assignee on the contract. He believes that is not possible. We had to get the offer in to beat the deadline, so we let it slide. In our contract, their is a whole paragraph on assigning, so we may be able to still do it, or we may be forced to double close. Either way, it's one step closer to our first deal in the bag. We had our favorite investor check out the property and he is passing on it because he believes it has foundation issues. Yikes! And, we are putting up our own earnest money. So, not completely smooth, but we do have our out clauses in the contract, so if it locks up, we should be able to pass it off and make some dough. Just nervous for our first deal. This stuff is fun though. I was also able to talk to a lady that answered one of our bandit signs. She was wanting us to do a lease option for her, but once we crushed the numbers, the margins were too thin, so I talked her off the ledge and convinced her to apply for a short sale from BOA. I typed up her letter for hardship and asked that she get the other documents ready for me. I hope she follows through. Anyway, enough about me and my anxieties, it's cool to see your journey on here. Keep it going, you are one sharp dude. -Susan

Hi DG's family,
I have been looking for someone to help me with this property I am going to offer to buy for my very first investment. Hope you guys can help.
---------------------------
Location : Nassau County NY
SHF : 2 bed / 1 bath
Year Built : 1940
Asking Price : 120,000
Area : 758 Sq.Ft
FMV ( From the county website ) : 252'000
Annual Tax : 7,800 ( Killing )
Utilities : 2,280 yearly
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Rental Income : 1,800 ( Section 8; gov pays 1500, tenant pays 300 )includes utilities
Cash flow after all expenses : 660

If I offer 75,000; Cap rate will be 10%
How much will you think it's worth to purchase.
All comments are very welcome.

Thanks

Hey Lenee,
I'm still looking there. What have you got? Email me.
I let me move to Suffolk County stall me on a deal. But that's still my main target of interest. Thanks for dropping in on me!

Hey Chad! I sent you an email a while back...are you still looking?

Best of luck and I also like the tetris analogy. Had to laugh at that one. TAmmy