I had been vowing to not buy any more properties. I already have several dozen rentals and have exceeded my goals for the business. My intention is to just get the business stabilized and then remain semi-retired, working 3-4 hours per day, 3-4 days per week.
Then it happened! On Friday evening, I received a call from a lady who was wanting to sell her house. This is the second call that I received from this same lady. When she called a couple of months ago, I told her that I wasn't interested in buying anything and that I simply wasn't interested. Obviously, this woman was DESPERATE to sell this property and was persistent enough to make a second call to me. Persistence is a trait that I admire.
At any rate, she caught me in a weak moment and I asked her how many bedrooms/baths the property had and how much she wanted for it. She gave me the location; told me that it had 2 bedrooms/1bath/a 1 car garage/a storage building and that she wanted $22,000 for the property. I didn't say anything for a few seconds and then she said that she could go as low as $20,000! From my knowledge of property values, I knew that this property in good condition should be worth about $52,000. I arranged with her to meet at the property at 10 am on Saturday.
The story on this property is that it had been her father's house. He died about 2 years ago and she desperately wanted to get rid of it. She has had the utilities on for 2 years; has been paying taxes; has been paying insurance; and she was tired of worrying that someone might vandalize the property.
I met the owner at 10 am Saturday, as scheduled. I spent about 10 minutes looking at the property. It is ready for a tenant to move in right now. The only real repairs needed are a few pieces of siding that need to be replaced and one broken storm window that need to be fixed (about $200 in total). I told the owner that I would take it for $20,000 Cash and we spent a few minutes signing the contracts. I intend to close on it by the end of the week, after a title search, so that I can get it rented for June.
The conclusion of all this is that I've done some deep soul searching. After literally SECONDS of deep introspection, I've decided that I'm addicted to buying real estate! First thing Monday I'll be in search of a 12-step program for real estate addicts. With a lot of work and many therapy sessions, maybe the next time that someone wants me to buy their property at 38% of market value, I'll be able to say NO! I know the odds are against me!
5 comments:
Another great acquisition Mike.
Keep that cash machine going.
-Mike
Am new at this. Rented primary home and bought duplex (living in one side) Have excellent renters. Want to buy more duplexes and have found some reasonably priced which I can refurbish fairly cheap as I have own people to do work and I can do wallpaper and paint. Thought we could move into one side of new duplex (renting our current side of duplex), taking advantage of lower down payment for primary residence; fix up both units and then move again to other properties, fix them up and move until we get enough steady money coming in to stay in one place (if this is possible to do legally for funding) Want to know best ways to get funding. I have about $30000 equity in former primary home. Can I turn this into business funds and do I need to change former home into business lean (how much does this cost). We have purchased former foreclosed condo at beach at low price and fixed it up and resold. I want to stay with property under $75000.Any suggestions?
Also, I forgot to mention I have worked for NC Housing Dept and know about Section 8 and have heard a lot of horrow stories but do know how it works. I would not want to do this at first. Also I will be getting social security in over a year and my husband works at FedEx so I would be using my Social Security income to further this business while my husband continues to work next 6 years. We want to have a lot of property with positive income before he retires as we baby boomers may deplete the social security funds!!Again, thanks for any tips.
I too would get addicted if I had enough capital to work with. I see properties that are very cheap and I know repairs would be minimal but dont have funds to pay 20% down for rental property. I note you are from Ohio. How far away are you from Sharon, Pa. There is one house for $3500. I don't know how bad it is but if you are near that area you might be interested. There are several properties under $15,000 around where my family lives. Don't know if you go that far away for property. My nephew did a lot of remodeling on his parents house on Russell St. Don't know if he could do any refurbishing but thought I would pass this along. Sandy
Sandyd,
It sounds like you're off to a good start with your rental business. I think rehabbing a duplex and then moving into a new one to rehab it is a viable way to get started in the business. Of course, you will need to buy right and rehab the property appropriately for the class of tenant.
As for financing, there are MANY ways to buy without using your own money. These methods include owner financing; subject-to; lease-option; land contract; etc. In addition, if you buy at a HUGE discount, you should be able to get a loan for the purchase price and rehab costs from a small local bank.
I don't know the circumstances of your first home, but getting the last $3,000 of equity out of the home may be difficult and quite expensive. I wouldn't do that.
Happy Investing!
Mike
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