Third Times a Charm?

So I have decided that I am going to try to document the progress Kendal and I are making to become real estate investors and secure our financial future.  We have also found it very hard to get educated without spending money for boot camps or classes.  My goal is to document our investing to provide a learning forum for others and a online scrapbook for ourselves.

To get up to speed quickly we have been working since the beginning of the year to get educated and start investing in real estate. 

We joined the Greater Dayton Real Estate Investing Association in January and started going to meetings.  We set up our LLC through Legal Zoom (Wright up Your Alley LLC) and I made Kendal very proud when I found a coupon online to save on the fees.  It was a smooth transaction and I was very pleased with the service.  We started looking at houses with our first real estate agent (remains unnamed) who did not work with investors and it was very obvious from the first meeting. Learned quickly work with a realtor who knows investing.

After looking at a good number of houses, I found a duplex and called the number on the sign next door to see what they were getting for rent.  This is when I met Jan Augenstien and from the first phone call she was helpful.  She works closely with her brother and does mostly investing.  She began to take me through houses and show me a whole different side of looking at the house.  It works out that she is a realtor also.

We contacted Day Air Credit Union and spoke to John Theobald who very quickly approved us for a rehab loan and we were on our way looking for our first house.

She also helped us with our first two offers on two different houses that we were unable to come to terms with the seller.  The first house had a lot of repairs and we low balled.  The second house was nicer and we were outbid by multiple offers.

That brings us to the present.  We have decided to focus in Fairborn because we believe it is a strong renter's market and the commercial growth in both Beavercreek and Fairborn will continue to drive the growth in the area and create a larger housing demand.

With this focus we found our recent house last week.  It was listed for 49,000 and from our estimation it will take very little work to be ready to rent.

 The exterior looks good with updated siding and the roof has no visible damage.  The kitchen cabinets could use a little work and the hood vent will need to be replaced.  The floor will eventually need to be dealt with and two windows will need to be replaced down the line.  For less $1,000 we feel this kitchen would be very nice for a renter with new energy efficient windows.

The flooring throughout the house is nice and ready to go with some minor cleaning of carpet needed in the bedrooms.

The bathroom will need to have the vanity repaired or replaced.

The guts of the house (HVAC, plumbing, electrical) appear to be in good shape and updated but an inspection will definitely be in order to be sure of it.

We felt the house offered good potential for cash flow considering the low price and the strong rental neighbor.  There are three rentals within one house of this house and they are all occupied.  In talking with a neighbor she said the neighborhood was nice and quiet and her daughter lives two houses down and rents for $700 a month.

We felt the 49,000 was a bit high so we offered 42,500, they countered at 46,500 and we accepted that offer.  We are currently awaiting bank approval as it is a short sell.  We probably could have countered again but we felt 46,500 was good.

Again this is where a lot of people would start thinking of all the things that could go wrong and how terrible it is to rent to people and the what ifs.  That is exactly why we are considering this business because so many other people are scared to do it so the opportunity is there for us to conquer our fears and make money doing it. 

If renting to people were a bad business, then would a lot of the millionaires in the world have rental proprieties?
If renting were a bad business, would my apartment complex be in business?

These are the questions I ask when fear starts to creep in.  I ask myself how am I different than the hundreds of investors out there who are less educated, less organized and have more wealth than I do?  I have more fear than they do right now and less experience.

In 2000, 33.8% of Americans rented a house.  I imagine that number is higher now with the two recessions we have seen since then.  I doubt that all those renters are bad and a complete headache.

Wish us luck as we move one step closer to becoming landlords.  Next step is getting bank approval and then it is on to inspection time..