Rental Property Number 10 is Under Contract!

It did not take me long after 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 our 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!

For more information on my investing strategies check out my complete guide to purchasing long-term rental properties.

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!

For more information on how to buy the best rentals which will make the most money, check out my book: Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely. The book is 374 pages long, comes in paperback or as an eBook and is an Amazon best seller.


Rental Property Number 10 Has Been Purchased; Video and Pictures

10th rental propertyI purchased rental property number 10 on March 19! I am a little late posting the details on it because my wife and I were in Mexico at the time. It was such a wonderful vacation without the kids that I forgot to write a post about the purchase! Rental property number 10 is much different from my other rental properties; smaller, older and in a different town. Here is the video of Rental property number 10. The video was taken after the repairs have been complete because I did not get a chance to take a before video on this property.

For more information on my rental properties and investing strategy check out my complete guide to purchasing long-term rental properties.

The details on rental property number 10

Rental property number 10 was built in 1956 and is a 3 bedroom 2 bathroom house with a one car detached garage. This home is a little older and smaller than most of my rental properties.  It was cheap at only $99,917 and in decent shape.

The kitchen was updated, has nice flooring and only needed a bit of work in a bathroom and some drywall installed. It was less than $3,000 to get the property ready to rent. Here is an article with much more information on how I repair my rentals.

How I bought rental property 10 and what is it worth?

rental property 10 kitchenRental property number 10 was on the MLS and I made an offer immediately on the home. The home was listed for $99,917 on a Friday afternoon, I went and saw the home and made an offer of $95,000 with seller paying $2,000 in closing costs. I received a counter on Saturday that was $99,917 with the seller paying $2,000 in closing costs. I accepted the counter offer since this was a great deal and the home needed little work.

I feel this home is worth at least $130,000 with the little repairs I made on it. I have no idea why they listed it so low, but it was an investor selling it. He may have wanted to get rid of it quickly. For more information on how I get such great deals check out my book: How to Buy Real Estate Below Market Value, which is available as a 116 page E book on Amazon or as a PDF here.

Safety issue on rental property 10

This property had an interesting feature when I bought it. There were two ponds in the front yard connected by a concrete stream bed. I like ponds, but not in my rentals and certainly not in the front yard. The last thing I want is a little kid falling into the pond, so I had the ponds and concrete all taken out.

Where is rental property number 10?

Rental property number 10 is in a small town called Kersey about 7 miles East of Greeley. All my other rentals have been in Greeley or the adjoining town of Evans. I chose Kersey because our area has a huge oil boom right now. Kersey is the closest town to the oil and gas boom, and I feel has great demand for rentals.

What will rental property number 10 rent for?

rental property 10 living roomThis is the big question! There are no rental listings in the entire town right now. There was a one bedroom listed for $600 last month and a studio listed for $700 earlier this month. Both of those properties rented and now there are no listings. I am going to ask $1,250 and see what type of response I get. Hopefully we will get it rented soon! Here is more information on how to determine market rents.

The loan on rental property 10

I was able to get a loan on this property through my portfolio lender. I used another 5/30 year ARM with a 4.5 interest rate and 20% down. My payment is $476.02 a month including taxes and insurance on the home. To figure the cash flow, check out my cash flow calculator here. The best part is since I am using a portfolio lender they will keep lending to me on more than ten properties.

Conclusion

I am getting closer to my goal of purchasing 100 rental properties by January by 2023. I have a lead on rental property number 11, which is not an MLS listing. I will continue to post updates on Facebook on my flips and rental properties. Be sure to like our page for a chance to win the Complete Blueprint to Successful Real Estate Investing!

For more information on how to buy the best rentals which will make the most money, check out my book: Build a Rental Property Empire: The no-nonsense book on finding deals, financing the right way, and managing wisely. The book is 374 pages long, comes in paperback or as an eBook and is an Amazon best seller.

12 thoughts on “Rental Property Number 10 is Under Contract!”

  1. 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!

    • 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.

  2. 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.

  3. 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.

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