It was August 2016 and I was looking for another flip. I text the only wholesaler I know “where the deals at?” during a Friday home happy hour. My wife and I love a Friday home happy hour. I have known the guy since childhood and he has been the closest thing to a mentor I have. He text right me back and said he just got a 2/1 under contract that he would sell for 35k that rents for $900. I liked the sounds of those numbers and he agreed to give me the weekend to evaluate before he showed it to his other buyers.
The tenant had been there for 3 years and did not want to leave. Section 8 paid 96% of the rent which is guaranteed in your account on the 1st of every month. I reached out to a friend that had a few section 8 properties. His experience with section 8 has been positive and he agreed it looked like a good deal. I met my buddy/wholesaler for breakfast to sign the contract. I followed that breakfast up with a round of golf at another friends country club. The entire day was a small glimpse into a desired lifestyle.
After closing cost I was in the property for 39k. I set up the automatic deposit with housing authority and we were off. Installed new kitchen floor and bathroom floor which was under $1000 with labor. A much needed termite treatment dinged me a little. Three months in and I am in the process of trying cash out refinance. I wasn’t aware “cash out refinancing” was a thing a year ago but I just keep listening and reading. The place still needs a lot of work but I will wait until the current tenant moves to do any significant rehab.
Rental #1 is a bit of a junker. Rental #1 will not greatly appreciate. Rental #1 is 2 bedrooms which is not desirable. There are many things Rental #1 it is not but most importantly IT IS A START. The goal may be large but as the saying goes – How do you eat an elephant? One bite at a time.