When I decided to get into real estate in 2018, I was not expecting to be a Section 8 Landlord. However, the day I met with my now Property Manager, she already had a tenant lined up.
After viewing the house that was still in renovation mode at the time the tenant liked it and we started signing the papers right away.
Today, I’m happy that I am a section 8 Landlord. I have not been affected by the pandemic. I don’t have a mortgage on the property and I’ve been able to pay insurance, property taxes, and repairs with no issues since I’ve been receiving rent once a month.
A couple of months ago, I asked for an increase for the first time. It was approved and I’m so glad. Now, I’m going to be faced with a new challenge. With this increase, the tenant will have to pay me a portion of the rent. It’s not much, but it’s still something that I have yet to experience.
In August 2020, I wrote an article about my first tax lien buying experience in MS. Click on the link to review the post. Tax Lien Buying in MS
Yesterday, I went to the mailbox and low and behold, I received mail from MS. Immediately, I knew someone had paid their property taxes and I was getting the money I paid back plus interest which I was looking forward to. Low and behold, that is not exactly what happened. Yes, I got some money back with interest, but not everything I paid.
Here’s the breakdown on what happened.
Tax lien cost $177.33
I paid $199.33
I received $193.29
When I looked at the stub that came with the check. it listed the delinquent amount which in my case is $177.33 and then it lists the interest on that amount which is 15.96% and that’s how I ended up with $193.29.
Now I lost $6.44 but it’s also a gain because I learned that I should have paid more attention to the training for the website and during the live auction. I’m pretty sure this is the lien I was bidding against myself on. I was in a bidding war with someone and went a little too far. LOL! I’m laughing because it’s an easy mistake to make when dealing with online bidding and attending the live auction. Normally, I wouldn’t attend the live bid, I would place my bids and wait for the results. This is not something I’m going to beat myself up over, but it is something I wanted to share because it’s an easy mistake to make for anyone.
On a positive note, let’s say I did only pay $177.33 for it and I received $193.29 with the 15.96% interest. That’s $15.96 on $177.33. You are not going to get that with your money in a bank. Keep in mind, I purchased this in August 2020 and it’s February 2021. I can’t make that much interest on $5,000 in the bank in 6 months. It’s definitely something to think about as you find ways to make your money work for you.
If you are interested to see other rate of other states, check out the link below.
Earlier this week, my hometown of Meridian, MS got hit pretty hard with winter weather. It snows about 3-4 years in that area, however if 2020 wasn’t enough to put everyone on edge, the winter storm of 2021 sure did.
After checking on my immediate family, I reached out to the Property Manager I have looking after my rental property in the area to check on her and the tenant in my property. I was not surprised to hear something had happened. However, I am pleasantly pleased at how she has handled the situation.
The tenant was not at home at the time and a pipe under the second bathroom burst and she was already on it. She’s already hired someone to fix the issue and turned the water off to prevent a large bill for the tenant. She said, “I only want to involved you when I really need to”. That to me is a sign of a great Property Manager. She knows I don’t live in the state and that I have other things going on and understands the importance of her position to take care of the tenant needs and the property.
In this moment, I couldn’t be more happy that I actually pay someone 10% of the rental income to have someone to take of things like this. I’m also reminded of a book I read named Long-Distance Real Estate Investing By David M Greene that recommended hiring a property manager as well. My advice to anyone especially, if you are a long distance real estate investor is to add a Property Manager to your team. It will be better for you in the long run.
One of the things, that I found to be tough as I began my real estate investment journey was building my team. It’s something that I still struggle with today and it’s partly because I don’t live in the areas I invest in.
As a newbie real estate investor, you hear people say, you have to build a team and you’re like okay. That involves a variety of people with different skill sets. Since I invest in Mississippi and I don’t currently live there, I had to network via Facebook. I was fortunate to reach out to a couple of people who came across my Facebook newsfeed from the area I am investing in who were also investors in the city and had connections and contacts and didn’t mind sharing. Of course there are other ways to connect with people via the internet and other social media platforms. On my first property, I knew I was going to need a Contractor, an Insurance Agent and a Property Manager. I thought that would be my team and I was good.
But later I found out that, building a team involves a lot more people. In order to grow the business, I’m going to need several Contractors, not just one, a Property Manager, a Realtor, an Insurance Agent, and a Lender, and a few people in my life to talk to when I need to vent or bounce ideas off of. It’s a whole system of people who I can rely on to get the things I need that will help me reach my goals. Of course I read a couple of books about it and one of the best ones, I read that helped me is Long Distance Real Estate Investing by David Greene.
It’s not an easy thing to do and it will take some trial and error, but I know once I’ve gotten my team down solid, the sky is the limit and at that point.
The first question people ask me when I tell them that I invest in Real Estate is “why did you decide to start investing?” Although my purpose has changed since I made the decision. It all started because of my budget. I purchased my current home in 2017 after renting for a while. Then I bought a new car in 2018. Yes, I bought it brand new and after buying the car, I started looking at my monthly budget and noticed that I wasn’t saving as much money as I used to nor that I wanted to.
Of course, me being the over analyzer that I am sometimes, I took a deeper dive into my finances as a whole. I looked at how much I was spending on everything. I created an Excel spreadsheet to look at how much money came in and out of my bank account. Every month after I looked at the money I would have left after I paid all my bills, I took the remainder and either put it aside or I invested it. I did this process for about 8 months and was helpful to know where I can take some risks with investing and saving.
For anyone looking to invest, I highly recommend that you analyze your monthly finances first. I often hear people asking questions such as what should they invest in or how much money do they need to start investing. The answer is simple. What can you afford?