12/17/2010
I've been reading the journals posted here and, having been inspired, I decided to start my own. In my experience, the single most important thing you can do to improve your chance of success in most endeavors is to associate with like-minded people. Even better: to associated with people who have already achieved what you hope to achieve.
I also want to start this journal to give me a place to track my progress, discuss ideas and primarily to hold myself accountable.
So for this first post, I wanted to talk a bit about where I'm coming from and where I want to be.
I've been working for about 5 years now and it only occured to me quite recently, about two years ago, that there has got to be a better way than the path I was shown. Like many, the map laid out before me was simple and it highlighted the path of least resistance: go to college, get a job, buy a car and a house, save 15% of your income for retirement, work for 40 years, and then a sort of unspoken step which was recently pointed out to me - hope you die before you run out of money. So begins my search for another map.
Eventually, I came across the idea of passive income, and a little later, I discovered real estate as a means of generating it.
Fast forward about a year and a half later. We bought our house and got married - two big expenses which we wanted to get out of the way before we started with real estate. A year of saving and a cashed-out 401k from my previous employer left us with enough capital to purchase our first rental, which we bought mid-August 2010.
A few more months forward and we are at the present. Previously, I had focused almost entirely on the income side of the FI equation. After discovering this place, I realized that I needed to give equal attention to the expense side as well.
Goals:
* Purchase our second rental by the end of 2010 (didn't quite make it but we have a contract so I'm counting it).
* Next year, purchase 3 more rentals which will hopefully add another $600+/mo in passive income.
* By May 2013, retire my wife so that she can be a stay-at-home mom. This is going to be a challenge since she basically brings in 1/2 of the money.
Recent ERE Progress:
* We cancelled our gym membership, our cable tv (replaced with netflix) and I've resolved to mow our lawn (this is a big deal).
* I'm learning to cook with staples and to use our pressure cooker, which we got as a wedding gift and had used probably once since we got it. Recently, i've used it 4 or 5 times. My wife even found a super easy recipe to make apple sauce which turned out great. I'm hoping to eventually cut our food budget down to half of what it used to be and still eat well (we are mostly paleo).
* We're trying to optimize our driving to use less tollways. Not as easy as it sounds since there are so many tollways in our area.
* We also got 2 bikes off of craigslist which we will use to go to the store and such. We still need to buy helmets and locks. Eventually, I want to ride it to work (a little over 6 miles).
Upcoming posts:
* A case study of our first rental
halcyon's journal
@Carlos I try not to be so hard on myself since it you don't really think about it, that's the plan your follow. After all that's what everyone does.
Case Study: The First House
We found the property through an online portal setup by our realtor. It was a bank-owned foreclosure which had been on the market for more than 100 days. The property was in pretty good condition (for a foreclosure). Here are a few details of the rennovations:
* New flooring everywhere except the kitchen.
* Interior/Exterior paint
* Fence repair
* Replace all the fixtures
* New kitchen appliances
The repairs took about a month to complete.
Here are the purchase details (some numbers are rounded):
ARV: 105,000 (After repaired value, confirmed by appraisal)
Price: 68,000
Repairs: 14,000
Closing Costs: 4,200
All In: 86,200
Financing:
"Hard Money" loan. 70% LTV (loan to value, where value is the ARV), interest-only @ 16% interest, 6 month term. More on this later.
Loan amount: 73,500 (70% of 105k)
Paid at closing:
All In - Loan = 86200 - 73500 = 12700
3 months of interest payments, a refinance into a conventional mortgage, and a few more expenses (landscaping, additional repairs) added another $2100 out of pocket.
Total out of pocket: about 14800
We had a deposit and a signed lease with a nice family for 950/month before the repairs were done. After the mortgage, taxes, insurance, and a maintenance fund we net $211/month. They pay electronically with an automatic transfer and so far haven't missed a payment.
At month three, we refinanced into a 30 year fixed mortgage at 5.5%.
A note about hard money: some people scoff at how expensive this kind of loan looks on paper - and it is. But it has a a lot of advantages over any bank loan which I will cover in another post. Besides, it's meant to be temporary.
211*12/14800 is a cash on cash return of 17.1% before taxes.
Our new loan is 77,625 and it was reappraised at 103k which means we captured about 25k in equity.
We plan to keep it for 3-5 years.
Case Study: The First House
We found the property through an online portal setup by our realtor. It was a bank-owned foreclosure which had been on the market for more than 100 days. The property was in pretty good condition (for a foreclosure). Here are a few details of the rennovations:
* New flooring everywhere except the kitchen.
* Interior/Exterior paint
* Fence repair
* Replace all the fixtures
* New kitchen appliances
The repairs took about a month to complete.
Here are the purchase details (some numbers are rounded):
ARV: 105,000 (After repaired value, confirmed by appraisal)
Price: 68,000
Repairs: 14,000
Closing Costs: 4,200
All In: 86,200
Financing:
"Hard Money" loan. 70% LTV (loan to value, where value is the ARV), interest-only @ 16% interest, 6 month term. More on this later.
Loan amount: 73,500 (70% of 105k)
Paid at closing:
All In - Loan = 86200 - 73500 = 12700
3 months of interest payments, a refinance into a conventional mortgage, and a few more expenses (landscaping, additional repairs) added another $2100 out of pocket.
Total out of pocket: about 14800
We had a deposit and a signed lease with a nice family for 950/month before the repairs were done. After the mortgage, taxes, insurance, and a maintenance fund we net $211/month. They pay electronically with an automatic transfer and so far haven't missed a payment.
At month three, we refinanced into a 30 year fixed mortgage at 5.5%.
A note about hard money: some people scoff at how expensive this kind of loan looks on paper - and it is. But it has a a lot of advantages over any bank loan which I will cover in another post. Besides, it's meant to be temporary.
211*12/14800 is a cash on cash return of 17.1% before taxes.
Our new loan is 77,625 and it was reappraised at 103k which means we captured about 25k in equity.
We plan to keep it for 3-5 years.
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Such a wonderful explanation and still it creates questions (how does that happen?!? LOL)...
1) Since it's a cash machine now, why would you only keep it 3-5 years?
2) You have a sale value at $68k to go clobber any existing property tax assessment... after the fix-up, do you expect property taxes to increase significantly and, if so, will the rent be raised to compensate? [here in Oregon, if the renovations required any building permits, then the assessed property value would be reset to market value of the improvements, but if no permits are pulled, then the last sale price is the base assessed value]
1) Since it's a cash machine now, why would you only keep it 3-5 years?
2) You have a sale value at $68k to go clobber any existing property tax assessment... after the fix-up, do you expect property taxes to increase significantly and, if so, will the rent be raised to compensate? [here in Oregon, if the renovations required any building permits, then the assessed property value would be reset to market value of the improvements, but if no permits are pulled, then the last sale price is the base assessed value]
Thanks George, I'm happy to hear that I wasn't too long winded. 
1) Since we fixed nearly everything up-front and made the tenant responsible for most of the repairs, we don't expect to spend much money maintaining it and we plan to get out before anything serious needs replacing (roof, hvac). Additionally, we want to take the equity and roll it into another property or two. Our return on equity of 9.8%, less than our cash on cash.
2) We actually haven't protested our taxes yet so it's on the tax roll for more than the purchase price. Even the purchase price plus the repairs would be less than what it's assessed at now but we will see how it goes when I visit the tax assessor.
1) Since we fixed nearly everything up-front and made the tenant responsible for most of the repairs, we don't expect to spend much money maintaining it and we plan to get out before anything serious needs replacing (roof, hvac). Additionally, we want to take the equity and roll it into another property or two. Our return on equity of 9.8%, less than our cash on cash.
2) We actually haven't protested our taxes yet so it's on the tax roll for more than the purchase price. Even the purchase price plus the repairs would be less than what it's assessed at now but we will see how it goes when I visit the tax assessor.
Sure, Q.
A hard money loan is offered by a private individual or company (not a bank) to purchase a piece of property. Its a lot like a bank loan but it has a lot of neat features which make it very effective for purchasing distressed property.
1) It can close in as little as 5 days. Many listings will say "Cash or hard money only" because the seller wants a really quick close.
2) You can use it to purchase properties which are uninhabitable (most foreclosures) and therefore don't meet underwriting guidelines for the big banks.
3) The loan is based on the after repaired value of the property, not the purchase price. With hard money, we are able to borrow up to 70% of the ARV whereas if we had gone with a conventional loan, our loan would have been 80% of 68k (20% down payment).
4) You can often borrow money for the repairs. With a purchase price of 68k and a loan of 73.5k, this left us with 5.5k to help pay for closing costs and repairs.
Hard money loans, while expensive, can be a very valuable tool for purchasing a foreclosure or run down home. In fact, if you get a really good deal where the purchase price, repairs and closing costs come in under 70% ARV, you might even be able to get the property for next to nothing.
A hard money loan is offered by a private individual or company (not a bank) to purchase a piece of property. Its a lot like a bank loan but it has a lot of neat features which make it very effective for purchasing distressed property.
1) It can close in as little as 5 days. Many listings will say "Cash or hard money only" because the seller wants a really quick close.
2) You can use it to purchase properties which are uninhabitable (most foreclosures) and therefore don't meet underwriting guidelines for the big banks.
3) The loan is based on the after repaired value of the property, not the purchase price. With hard money, we are able to borrow up to 70% of the ARV whereas if we had gone with a conventional loan, our loan would have been 80% of 68k (20% down payment).
4) You can often borrow money for the repairs. With a purchase price of 68k and a loan of 73.5k, this left us with 5.5k to help pay for closing costs and repairs.
Hard money loans, while expensive, can be a very valuable tool for purchasing a foreclosure or run down home. In fact, if you get a really good deal where the purchase price, repairs and closing costs come in under 70% ARV, you might even be able to get the property for next to nothing.
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
@Kevin M Thanks, we were pretty happy with it. This one in the pipeline looks like it could be even better. More on that when it's done...
To find a renter, we posted a sign in the yard as well as a craigslist ad. We spent money on the local classifieds but didn't get enough interest to make it worth the cost.
We hired a general contractor to do the repairs. We both work full time and neither of us is particularly handy (I'm working on it) so we thought it best to hire a professional. Even if i knew how to do all of it, I don't think I would do any of it since my time is better spent looking for the next deal. When my wife retires, we will probably forgo the general contractor and instead hire out all the individual jobs to save money on contractor fees.
To find a renter, we posted a sign in the yard as well as a craigslist ad. We spent money on the local classifieds but didn't get enough interest to make it worth the cost.
We hired a general contractor to do the repairs. We both work full time and neither of us is particularly handy (I'm working on it) so we thought it best to hire a professional. Even if i knew how to do all of it, I don't think I would do any of it since my time is better spent looking for the next deal. When my wife retires, we will probably forgo the general contractor and instead hire out all the individual jobs to save money on contractor fees.
01/06/11
-== December 2010 Summary ==-
It was a good month for my family. Despite going over on our Christmas budget (we saved a set amount over the year using SmartyPig), my family kept more of our income this month than in any preceeding month since I've been keeping records, with a total savings rate of 43%.
Accomplishments:
- Severe reduction in spending: We've cut out a lot of fixed expenses these last couple of months including gym membership and lawn mowing service. Additionally, we have cut our discretionary spending and put ourselves on a cash "allowance" which turned out to be a highly effective tool for cutting costs. I think the amount we picked might actually be a little too high but it's FAR less than we were spending before.
- Learning to cook: my wife and I have taken it upon ourselves to really learn how to cook (and how to shop effectively). We eat mostly paleo and so it can get expensive. In December, we set a modest (for us) grocery budget and we went over by only $7. This included our normal cooking plus some holiday cooking for family gatherings and whatnot.
- Rental Property #2: We got our second rental under contract in december and we are set to close soon.
Opportunities:
- We got some money for Christmas and spent almost all of it on our vacation. I guess this is ok since it meant that our vacation didn't impact our budget but it would have been nice to find ways to keep more of it.
- Going over our Christmas Budget: This is partly because we didn't budget for gifts to each other...
- Forced to buy a new car: I say forced because at the time I didnt see any other option. I had been saving for almost a year to purchase a new car and I was hoping to have another 6 months of saving. My old car finally died and we ended up financing a used car. I really do need a car for my business, at least it would be incredibly difficult without one...
-== 2010 Summary ==-
This year was a good year for my family. We got married, bought our first rental property, and got our second one under contract. We made and saved more money than ever and have more to show for our efforts than before. This is the year that I discovered ERE (in November) and got my head on straight. Saving only 15% wasn't going to cut it...
-== 2011 Goals ==-
This year will be the first full year where we are trying to push the savings rate as high as it will go. I'm extremely excited about the possibilities this year will bring.
- Buy 3 more rental properties
- Continue to cut costs: I see room for improvement in food, transportation, bills/utilities, discretionary, and what i like to call "future spending" which is money we are saving with the express purpose of spending it later (vacations, home improvement).
- Become more active in my real estate investor community
- Get back on track with fitness and nutrition
- Get on a regular sleep cycle and start waking up earlier
-== December 2010 Summary ==-
It was a good month for my family. Despite going over on our Christmas budget (we saved a set amount over the year using SmartyPig), my family kept more of our income this month than in any preceeding month since I've been keeping records, with a total savings rate of 43%.
Accomplishments:
- Severe reduction in spending: We've cut out a lot of fixed expenses these last couple of months including gym membership and lawn mowing service. Additionally, we have cut our discretionary spending and put ourselves on a cash "allowance" which turned out to be a highly effective tool for cutting costs. I think the amount we picked might actually be a little too high but it's FAR less than we were spending before.
- Learning to cook: my wife and I have taken it upon ourselves to really learn how to cook (and how to shop effectively). We eat mostly paleo and so it can get expensive. In December, we set a modest (for us) grocery budget and we went over by only $7. This included our normal cooking plus some holiday cooking for family gatherings and whatnot.
- Rental Property #2: We got our second rental under contract in december and we are set to close soon.
Opportunities:
- We got some money for Christmas and spent almost all of it on our vacation. I guess this is ok since it meant that our vacation didn't impact our budget but it would have been nice to find ways to keep more of it.
- Going over our Christmas Budget: This is partly because we didn't budget for gifts to each other...
- Forced to buy a new car: I say forced because at the time I didnt see any other option. I had been saving for almost a year to purchase a new car and I was hoping to have another 6 months of saving. My old car finally died and we ended up financing a used car. I really do need a car for my business, at least it would be incredibly difficult without one...
-== 2010 Summary ==-
This year was a good year for my family. We got married, bought our first rental property, and got our second one under contract. We made and saved more money than ever and have more to show for our efforts than before. This is the year that I discovered ERE (in November) and got my head on straight. Saving only 15% wasn't going to cut it...
-== 2011 Goals ==-
This year will be the first full year where we are trying to push the savings rate as high as it will go. I'm extremely excited about the possibilities this year will bring.
- Buy 3 more rental properties
- Continue to cut costs: I see room for improvement in food, transportation, bills/utilities, discretionary, and what i like to call "future spending" which is money we are saving with the express purpose of spending it later (vacations, home improvement).
- Become more active in my real estate investor community
- Get back on track with fitness and nutrition
- Get on a regular sleep cycle and start waking up earlier
@halcyon
I empathize with you about the car. My master/slave cylinder krapped out on the drive to mom's for Christmas; so Santa delivered a $600 lump of coal. All during the holidays my mother was saying "Why don't you buy a new car?" But as I patiently explained to her, $600 is like two payments on a new car; so if the old Chevy can make it three more months, I feel like I'm ahead of the game. And I am now looking at studio apartments within walking distance of work with greater furvor. As a bonus, Amtrak is also within walking distance of work; and work will provide a monthly transit pass free of charge to any employee who doesn't use parking. So, I am working to take the truckless plunge in 2011.
I empathize with you about the car. My master/slave cylinder krapped out on the drive to mom's for Christmas; so Santa delivered a $600 lump of coal. All during the holidays my mother was saying "Why don't you buy a new car?" But as I patiently explained to her, $600 is like two payments on a new car; so if the old Chevy can make it three more months, I feel like I'm ahead of the game. And I am now looking at studio apartments within walking distance of work with greater furvor. As a bonus, Amtrak is also within walking distance of work; and work will provide a monthly transit pass free of charge to any employee who doesn't use parking. So, I am working to take the truckless plunge in 2011.
@Maus
That's too bad about your car!
I would absolutely love to go car-less or at least sell 1 car. If you can pull it off, more power to you! For me, I can bike/walk to work which is 6 miles away but my wife works clear across town. Sometimes, I need to go visit a property during my lunch break to do a walk through or inspection. If she had the car, I'm not sure what I would do... I think eventually I might just have the business buy an old, used car and use that when I have to. At least then, it would be entirely deductible.
That's too bad about your car!
I would absolutely love to go car-less or at least sell 1 car. If you can pull it off, more power to you! For me, I can bike/walk to work which is 6 miles away but my wife works clear across town. Sometimes, I need to go visit a property during my lunch break to do a walk through or inspection. If she had the car, I'm not sure what I would do... I think eventually I might just have the business buy an old, used car and use that when I have to. At least then, it would be entirely deductible.
2/3/2010
-== January 2011 Summary ==-
It month was a pretty good month for my family. My wife is in the process of getting her real estate agent license which requires quite a few startup costs (which will all be tax-deductible of course) but we still managed to save 36% of our income. I've revised our budget over the last couple of months and with the changes we've made this month, we should be able to save more than 50% of our income in an average month.
Accomplishments:
-Drastic reduction in "future spending". I mentioned before that we have a bucket (actually a SmartyPig account) where we save for vacations, home improvement, and such. This month we decided to take the money we had saved for my wife's next car and put most of it into repairs on the current car while at the same time, resolving to leave it in the driveway as much as possible. These two steps combined should allow us to keep it for a much longer time in addition to diverting these funds towards more important goals.
-Closing on our second rental property. Renovations are underway and we hope to have it rented out by mid-March. When we do, I will post another case study with all the details. It looks to be even more profitable than the last one.
Opportunities:
-Food Costs. In February, we're really going to focus on our food costs. We lowered them by a bit last month by using more, cheap recipes from here and other places. I'm really enjoying cooking more than I have before.
-Toll Fees. We live right off the tollway and in North Texas, it seems almost every highway is a tollway. Through better planning, we will minimize and/or eliminate our use of the tollways.
-Sleep schedule. This month we will be waking up earlier and rolling back the clock every week until we are waking up at 6:00am every day. The extra time gained will be used for exercise and eating breakfast together.
-== January 2011 Summary ==-
It month was a pretty good month for my family. My wife is in the process of getting her real estate agent license which requires quite a few startup costs (which will all be tax-deductible of course) but we still managed to save 36% of our income. I've revised our budget over the last couple of months and with the changes we've made this month, we should be able to save more than 50% of our income in an average month.
Accomplishments:
-Drastic reduction in "future spending". I mentioned before that we have a bucket (actually a SmartyPig account) where we save for vacations, home improvement, and such. This month we decided to take the money we had saved for my wife's next car and put most of it into repairs on the current car while at the same time, resolving to leave it in the driveway as much as possible. These two steps combined should allow us to keep it for a much longer time in addition to diverting these funds towards more important goals.
-Closing on our second rental property. Renovations are underway and we hope to have it rented out by mid-March. When we do, I will post another case study with all the details. It looks to be even more profitable than the last one.
Opportunities:
-Food Costs. In February, we're really going to focus on our food costs. We lowered them by a bit last month by using more, cheap recipes from here and other places. I'm really enjoying cooking more than I have before.
-Toll Fees. We live right off the tollway and in North Texas, it seems almost every highway is a tollway. Through better planning, we will minimize and/or eliminate our use of the tollways.
-Sleep schedule. This month we will be waking up earlier and rolling back the clock every week until we are waking up at 6:00am every day. The extra time gained will be used for exercise and eating breakfast together.
3/3/2011
-== February 2011 Summary ==-
Overall, a very good month. We achieved a savings rate of 49.7% which is our highest yet, even though we had a few more start up costs to pay for my wife's real estate agent license.
We got our second rental property rented out and I hope to have it refinanced out of the hard-money loan in the next 40 days. This brings our total cashflow between the two rentals to around $550/mo after all expenses and saving for maintenance (im making an assumption on the amount of the future mortgage payment).
My wife got a good raise at her jay-oh-bee and we plan to save or invest the entire increase. She actually makes more money than me now... (by a few hundred a year). I just got a promotion so after my next performance review we will see who wins the most bread!
Accomplishments:
- The rental property was a big win for us. It's been a project that stretched back into December when we made the offer, and though we are not done with it yet we are in the final stretch. If we can find about 10 more just like it we could retire without any additional lifestyle changes.
- Toll fees: we've just about cut out our use of the tollways entirely. This month I paid the balance I owed from last month and nothing else.
- Food Costs: we spent less on food in February since I started really tracking it
Opportunities
- Complete and utter failure on my fitness and waking-up goals. I just can't seem to get back into the habit. I could say that I've been really busy with work and with family and friends but we all know that these are simply excuses.
- Transportation: Once we can start getting up early enough we are going to start carpooling and hope to lower our transportation expenses dramatically.
- Food costs: Still figuring out this "cooking" thing. We definitely don't eat dinner at home as much as we should and we end up spending a lot of our "adult allowance" on going out to eat.
Be on the lookout for the next case study! I'm very excited about this house!
-== February 2011 Summary ==-
Overall, a very good month. We achieved a savings rate of 49.7% which is our highest yet, even though we had a few more start up costs to pay for my wife's real estate agent license.
We got our second rental property rented out and I hope to have it refinanced out of the hard-money loan in the next 40 days. This brings our total cashflow between the two rentals to around $550/mo after all expenses and saving for maintenance (im making an assumption on the amount of the future mortgage payment).
My wife got a good raise at her jay-oh-bee and we plan to save or invest the entire increase. She actually makes more money than me now... (by a few hundred a year). I just got a promotion so after my next performance review we will see who wins the most bread!
Accomplishments:
- The rental property was a big win for us. It's been a project that stretched back into December when we made the offer, and though we are not done with it yet we are in the final stretch. If we can find about 10 more just like it we could retire without any additional lifestyle changes.
- Toll fees: we've just about cut out our use of the tollways entirely. This month I paid the balance I owed from last month and nothing else.
- Food Costs: we spent less on food in February since I started really tracking it
Opportunities
- Complete and utter failure on my fitness and waking-up goals. I just can't seem to get back into the habit. I could say that I've been really busy with work and with family and friends but we all know that these are simply excuses.
- Transportation: Once we can start getting up early enough we are going to start carpooling and hope to lower our transportation expenses dramatically.
- Food costs: Still figuring out this "cooking" thing. We definitely don't eat dinner at home as much as we should and we end up spending a lot of our "adult allowance" on going out to eat.
Be on the lookout for the next case study! I'm very excited about this house!
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mrsHalcyon
- Posts: 8
- Joined: Tue Dec 14, 2010 10:03 pm
I'm curious - how did you go about purchasing your first rental property? I'm interested in rental income for a variety of reasons (large distortions in the market, a good ROI, diversification, etc), but those also make it very intimidating.
How did you get comfortable with the investment (seeing as it's illiquid, potentially risky, and rather expensive)? Any books you'd recommend on the topic? Also - where are you located?
How did you get comfortable with the investment (seeing as it's illiquid, potentially risky, and rather expensive)? Any books you'd recommend on the topic? Also - where are you located?
@m741 All great questions. I'm based out of North Texas and the houses here are pretty cheap and home prices are pretty stable. The first thing we did is get educated. We joined a real estate investment group which has active members who could show us how to make money in our local market. They showed us what criteria to use and what kind of financing makes sense for investors (especially ones without a ton of capital).
Any investment is risky but I like real estate a lot because just about everything is under my control. What I buy, how i buy it, how i manage it, who i rent it to and for how much. But you can't look at it strictly as an investment because it's not: it's a business. You can contract out the property management to make it less involved (which i wouldn't recommend) but it's still going to take some work.
As far is it taking a lot of money... my first deal was about 14800 out of pocket but i'm in the process of refinancing my second one and it looks like its going to be around 8k out of pocket and a much higher return. Our closing date on the refi is April 5th.
Another great thing about real estate is that there are many ways to invest depending upon what you have more of: time or money. If you have more time than money, you can wholesale or find deals for other investors. If you have more money than time, you can be a passive partner or even "be the bank" and lend money to investors by creating your own mortgages.
Any investment is risky but I like real estate a lot because just about everything is under my control. What I buy, how i buy it, how i manage it, who i rent it to and for how much. But you can't look at it strictly as an investment because it's not: it's a business. You can contract out the property management to make it less involved (which i wouldn't recommend) but it's still going to take some work.
As far is it taking a lot of money... my first deal was about 14800 out of pocket but i'm in the process of refinancing my second one and it looks like its going to be around 8k out of pocket and a much higher return. Our closing date on the refi is April 5th.
Another great thing about real estate is that there are many ways to invest depending upon what you have more of: time or money. If you have more time than money, you can wholesale or find deals for other investors. If you have more money than time, you can be a passive partner or even "be the bank" and lend money to investors by creating your own mortgages.
I completely forgot to answer your book recommendation request. The best book I have read on the whole process of investing in single family homes is "Buy Low, Rent Smart, Sell High" by Scott Frank and Andy Heller. Their strategy involves doing lease-purchase agreements (rent to own) which are basically worthless in Texas because of recent legislation.
I would also highly recommend the online community biggerpockets.com which is kind of like the facebook of real estate investing.
I would also highly recommend the online community biggerpockets.com which is kind of like the facebook of real estate investing.