The promise of easy money and $54,000 turnkey properties were too much for Vasmi Boddu and his friends to resist. So in December 2017, they purchased a package of four properties in Indiana. With promises from the turnkey company that they would be ready for tenants in three months, Vasmi and his partners sat back to get ready for their mailbox money to show up.
You’re going to get a real estate education in one of two ways. You can either hire a mentor to help you figure out what a good deal looks like, or you can stumble through expensive mistake after an expensive mistake on your own. Vamsi chose the latter method, and he’s learned some important lessons, including how to correctly run the numbers on a rental.
How much cash flow is enough? Vamsi thought $200 a month per property would get him quickly to that sweet spot where he could sit back on the beach with his family. But as a real estate newbie, he didn’t know that he needed to factor into those numbers property insurance, rehab costs, property management, and vacancy rates. And when the original turnkey company didn’t even finish the rehab on time, Vasmi’s horror story began.
Don’t miss out on the rest of my Deals Gone Bad series. By texting the word “BAD” to 313131, you’ll be able to access the notes and mind map for this series, including the videos from Bigger Pockets that Vasmi recommends to all of his new real estate investor friends.
Watch and Learn:
Listen and learn:
- Vasmi’s classification system for A, B, C, and D areas.
- What to do with cheaper, lower-end properties that are under $100,000.
- We discuss Vasmi’s best options for some of his properties: lease options or tenant-buyers?
- How to deal with Class D tenants.
Mentioned in this episode:
- JoeMcCall on Youtube
- Wholesaling Inc Podcast
- Bigger Pockets
- Vamsi Boddu on Facebook
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