Video of Rental Property Number 9 and My Latest Fix and Flip
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!
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* Made $70,000 from rentals in 2014
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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!
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