and Just Like That the Specific Rental Property is Dead

///and Just Like That the Specific Rental Property is Dead

and Just Like That the Specific Rental Property is Dead

My last post was about a possible rental property I was very excited about possibly purchasing.  It was on the east end of Long Island, and could be used in the future as a possible vacation spot for those people involved in the deal.  However, as the title of the post indicates, the deal is all but dead.  I am pretty annoyed about it, but it is what it is.

Regardless of how I ran the numbers I just couldn’t get it to work if I was using debt (i.e. a mortgage) or if I was using the rental company which took 30%.  I was very up front and honest with the seller’s broker.  I gave him my calculations and put it in his court to let me know what I was doing wrong.  Instead of arguing my calcs and assumptions he just kept taking money off.  I eventually got him down to him $310,000 from $345,000, but it didn’t matter because even at $310,000 the numbers just simply didn’t work.

My Future in Real Estate

With that particular property out I decided to reach out to a few buddies that showed interest and laid out what I was looking for:

  • NO FLIPS
  • NO FORECLOSURES
  • NOT PUTTING A TON OF MONEY INTO WORK ON THE HOUSE RIGHT AWAY
  • Home in a nice school district (right now my focus is on the area around my main residence solely because that is what I know)
  • Cash flow positive – if I were going with cash flow negative I would have bought the previously discussed property
  • I do not expect to do all the work as it relates to finding houses and/or operations.  If something breaks there will be a rotating phone number call and I won’t be the only one to get the call/text/email in the middle of the day/night.  If there are landlord-tenant court dates I (or if there is another attorney in the group) will not be going for free.
  • I do not expect all those that I contact to end up in a deal.  Maybe I end up with 2 guys, maybe 4 but I will ask those that seem interested in the process first when I do find something
  • The home price is going to be under $400k…20% down and a HEALTHY reserve fund sitting in cash for dead months and/or repairs.

Upon sending that almost exactly bullet list to 4 buddies I can tell that 2 of them are likely not a good fit if I were to find something quickly…and that’s okay.  One, is dying to do a flip and I just can’t stomach that type endeavor as being my first entrance into real estate.  Him and I have talked about buying a place over the past few years, so I could maybe see something working out in the future.  The Second, didn’t seem interested in my process, and that is understandable, but I am not willing to deviate at this current juncture.  This is not to say it wouldn’t work out at a later date, but if I were to find anything quickly I would say that it would be unlikely I get to closing with him.

Wish me luck trying to find something!

 

By | 2017-07-30T23:04:34+00:00 July 31st, 2017|real estate|2 Comments

About the Author:

Evan is the owner of My Journey to Millions which was started to track his journey from a broke debt ridden law school graduate to building a positive balance. Need more Evan? Follow him on Twitter, Contact him or get new posts directly to your email

2 Comments

  1. Mrs. Adventure Rich July 31, 2017 at 7:33 am - Reply

    Ah, good luck! Mr. Adventure Rich and I recently considered a rental a few hours from us, but like you, the numbers just didn’t work out and the risk was too high for the location and type of rental, so we bailed. It was disappointing in some ways, but a relief in others.

  2. Buy, Hold Long July 31, 2017 at 11:06 pm - Reply

    That’s a shame that it didn’t work out but I’m sure there are other opportunities just around the corner.

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