On Friday February 14th I closed on rental property number 9! I took a video of the home today and you can see it right here; Video of rental property number 9. I also purchased a fix and flip last month that I took a video of a few weeks ago that I am finally getting around to posting. You can see that video here; Fix and flip. Enjoy the videos and if you want more information on the properties please keep reading!
For more information on my investing strategy, please check out my complete guide to investing in long-term rentals.
How much did I pay for rental property number 9 and why?
Rental property number nine was listed for $134,900 and I noticed the home within hours of it being listed on the MLS. The most money I had ever previously paid for a rental property was $115,000 for rental property number 6. The reason I was interested in rental property number 9 at a much higher price, was our market has taken off! It has been very difficult finding anything close to my buying criteria. I have been forced to look at higher priced homes and hope the sellers will negotiate more. When I saw this home in person I was very pleasantly surprised by the condition of the home.
Details on rental property number 9
Rental property number 9 is a ranch style home with 4 bedrooms 2 baths and a 2 car attached garage. The great part about the home is it has new windows, nice hardwood floors, a newer kitchen with all appliances, newer bathrooms and very little work needed. Most of my homes require at least $10,000 in repairs and many much more than that. This home should need less than $2,000 in work at the most and be ready to rent. The home has a very open floor plan and one of the bedrooms upstairs is actually two bedrooms that were converted into one.
What will rental property number 9 rent for?
Rental property number 9 should rent for $1,300 although our market is still incredibly tight for rentals. I have heard of people getting crazy amounts for rentals in our area, but I am not getting my hopes up. There is absolutely nothing for rent or for sale in our area and that has been pushing prices up for both rentals and sales.
Did I still get a good deal on rental property number 9?
I think I still got a great deal on this home, even though it was priced more and I bought it for more than my other rental properties. In the first day they had three offers on the home after I had submitted my offer. I initially offered around $118,000 with the seller paying $2,000 in closing costs. After hearing of the multiple offers I raised my offer to $130,000 and decided not to ask for any seller concessions. The seller ended up countering me at $133,000 and I accepted!
Why did I pay so much more for this rental property?
This home is still a good deal even though I paid more than I have for any other rental. The rents may be similar to my other rental properties, but this home needs virtually no repairs. Having to do minimal repairs gives me a couple of huge advantages over purchasing a home with repairs.
- I don’t have to wait for the repairs to be completed! I have 4 fix and flips and rental property number 8 still being worked on by multiple contractors. Saving time is saving money!
- Even though the home cost more money I am putting less cash into the home, because I pay less money in repairs.
- This home was still purchased below market value. I estimate I could sell it for $150,000 or more with very minimal repairs.
Fix and flip purchase
I bought the fix and flip in January and it has been sitting there waiting for us to work on it since! That’s not exactly true, we are waiting for a well permit to be approved on this home. This is not an easy fix and flip deal; this home needs a lot of work! I bought the home for $75,000, which is dirt cheap for a country property with 4 acres, 1,100 square feet, outbuildings and a quonset hut. The problem with the house is it was advertised with no well or septic system. I made an offer the first day it was listed and quickly got the home under contract. It turns out the property has a well and septic, but they have not been used for quite some time.
It is a really good thing the house already has a well, because it makes it much easier to re-drill the well. If there was no well on the home, they only way to get a well permit is to show there is no other water available to the home. There is district water available at a cost of $45,000 for a water tap! The well should cost less that $15,000 for a re-drill and all new equipment. The rest of the home needs completely remodeled as well and that is why it was so cheap. I could easily see spending $40,000 on repairs on this home, but it may be worth $175,000 when it is all done.
I am going to keep buying fix and flips and hopefully sell a few as well! We actually have a closing set for one of the fix and flips this week and another property is under contract. Rental property number 9 gets me closer to 100 properties and I will have news soon on number 10!