Rental Property Number 10 is Under Contract!

19 Feb
Rental Property Number 10 is Under Contract!

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10 rental propertiesIt did not take me long after on closing rental property number 9 to get number 10 under contract!  I made an offer on number 10 last Friday, they countered me on Saturday and I accepted their counter on Sunday.  I would have told everyone sooner (I actually did if you follow out page on Facebook), but I had a crazy weekend.  By crazy I mean laying in bed with food poisoning.  I did find a great diet plan; I lost 9 pounds in two days!

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Why did I choose a different location for my 10th rental property?

Rental property number 10 is much different from any other rental I have purchased.  The house is not in Greeley or Evans (connected towns), but in Kersey Colorado.  I have bought all of my previous rental properties in Greeley or Evans up to this point.  Kersey is about 7 miles East of Greeley and a great location for a rental property; at least I think it will be.

Why I chose a small town for a rental property?

Kersey has only a few thousand people and few amenities.  I would not normally invest in a small town like Kersey, but Kersey is the epicenter for oil and gas in our area.  There is a gas station in Kersey (great burritos) and every time I stop there, that station is full of oil field traffic and oil trucks.  Many of the oil fields are East of Greeley and Kersey is the last town for about 40 miles in that direction.

before I made an offer on this property I checked Craigslist and every rental site I could find for rental properties in Kersey.  I found one rental; Craigslist had an ad for a bedroom for rent for $600 a month.  That tells me the rental market in Kersey is very tight and I should have no problem renting the house.

The details on my 10th rental property

The first thing that many of my readers will notice is rental number 10 looks old!  The home was built in 1950’s which is at least ten years older than my other rentals.  I mention in this article why it is smart to try to buy newer rental properties, but I am still buying an older house.  I would prefer a newer home, but if the deal is right I will still buy an older rental property.  The home has three bedrooms, two baths and about 1,100 square feet total.  The home is in very good condition much like rental property number 9.  The home has a newer kitchen, newer baths, newer windows and only needs minor repairs.

Is my 10th rental property still a good deal even though it is in good condition?

I try to buy all of my houses for below market value, but that doesn’t mean they have to need a lot of work.  It is more likely to get a great deal on a home that needs work, but sometimes you can get a great deal and buy a home that is in good condition.  Much like Greeley prices have been increasing in Kersey and all the surrounding towns.  Getting a decent house for under $100,000 is hard to do anywhere in the area.  I think the home is worth 120,000 or more with minimal to no work being done.  I was able to get it under contract for much less than that.  I won’t give the details until it closes.

How did I get a great deal on this rental property?

The home was listed on a Friday and I went to see it that same day.  The property was a fair market listing and I made an offer that same afternoon.  Luckily no one else made an offer and the seller countered the offer I made, which was not too far below list price.  I was very surprised they did not receive multiple offers on the house, because it is a great price.  For those of you wondering how exactly a counter offer works.  In Colorado the seller can counter and give an expiration date for that counter.  The seller actually gave me a couple of days to respond to their counter and as soon as I accept and sign the counter the home is under contract.  However, just because they gave me a few days, does not mean they cannot rescind that offer if something better comes along.  It is still important to act quickly.

What will my 10th rental rent for?

This is the big question and I am not sure what the answer is.  There are no rentals on the market, but I know there is demand.  I know there are other investors buying rentals in the area as well.  I have sold a few homes in Kersey to investors who rented them out.  I am thinking it will rent for at least $1,100 a month and maybe a little more.  We will see what happens and how it works out!

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Why you should invest for cash flow

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12 Comments
  • Dylan Knight
    Posted at 01:58h, 20 February Reply

    Congrats on the 10th rental. One step closer to the big HUNDO! I am excited to see what the original numbers were.

  • Roxanne
    Posted at 08:28h, 20 February Reply

    This is telling me that even it is an older property, as long as the cash flow number works great and need no or little work before renting it out, still worth purchasing it. I had a similar case, I’m still debating if I should buy the property or not.

    • investfourmore
      Posted at 22:48h, 20 February Reply

      Roxanne, I think you can still make money with older properties, but you have to be sure the home has good bones and the systems are updated. be prepared to spend more on maintenance as well.

  • Jim
    Posted at 22:01h, 21 February Reply

    Good luck with #10 Mark, hope it works out for you. If the oil and gas industry in Kersey can even be 1/10th of the market it is in Western North Dakota, you are in fat city! Those properties there have skyrocketed and they can’t build new properties fast enough.

  • Daniel
    Posted at 05:44h, 23 February Reply

    how many houses are you hoping to buy in 2014?

  • Michael Ding
    Posted at 05:52h, 14 March Reply

    Mark, when you buy a rental property, do you collect the commission at closing and pay the federal and self employment taxes or do you put the commission towards your purchase price and avoid the taxes. Thanks!

    • investfourmore
      Posted at 20:12h, 14 March Reply

      Hi Michael, I do both. With most properties I just take the commission and pay taxes. Some sellers get confused when you reduce commission and on short sales and REOs it sometimes cannot even be conveyed on their offer worksheets. I figure it is better to pay the taxes then miss out on a deal.

  • Michael Riddle
    Posted at 17:58h, 25 April Reply

    If you haven’t rented it I would definitely be interested 9705 8400 16

    • Mark Ferguson
      Posted at 19:21h, 25 April Reply

      Hi Michael, It is actually rented for $1,250 a month now. Sorry about that.

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