I Invest In Real Estate
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House 02
After I refinanced my first house (see previous posts in this group), I was ready to look for another. I found a new prospect literally about 2 blocks from the first one. The house was listed for $105,000 and seemed to be in good condition, with a little floor repair needed. My realtor told me that the house was worth $110,000 and that the seller was anxious to sell. I made an offer for $100,000. Then came a big surprise.
The seller made a counter-offer of $90,000! I was stunned. My realtor found out that there was more wrong with the house, and the seller knew that as an investor, I would be willing to take it on. He had a job offer and really needed to move. I had a home inspector do an inspection, and he told me he wasn't sure if the furnace worked or not. Also, he told me the roof would need to be replaced in a year. That was 2004 and I literally had the roof replaced *today* in 2017! He was a bit off. I told myself that no one would live in a house without heat and bought the house. I was right and I was wrong.
I soon figured out that they had been heating the house with a gas fireplace! So, I gave back all of the $10,000 or so I had gained and had to install new heating and cooling, but now had a house with brand-new HVAC. This house also had no kitchen counter-tops, but I still managed to get it rented. I rented it for $950 a month, and my payments were only around $450, so it was very profitable. I went for an appraisal on the house and it came back at $110,000. I screamed and yelled that was too low, so the appraiser said, "OK" and made it $120,000. This was as the real estate bubble was getting revved up. Something like that would never happen today. I again refinanced, took maybe $20,000 out of the house and was ready to look for my next house.
Like many of my first properties, I skimped on the rehab, and a few years later had to go back and knock out the wall between the kitchen and dining room to create an open space kitchen and add a washer/dryer hookup. The house continues to be a great rental, it was vacant last month and somebody rented it the second day it was advertised.
Today, the house I bought for $90,000 is worth $158,107 (Zillow) with remaining mortgage of $86,591. It rents for $884 (after property manager takes his cut). My mortgage payment is $757 (it was interest only, but is now amortizing). Cash flow is $121 a month. Paydown is $281 for a total of $408 month.
My next house would prove to be much more ambitious. More on that when I get a chance.
House 02
After I refinanced my first house (see previous posts in this group), I was ready to look for another. I found a new prospect literally about 2 blocks from the first one. The house was listed for $105,000 and seemed to be in good condition, with a little floor repair needed. My realtor told me that the house was worth $110,000 and that the seller was anxious to sell. I made an offer for $100,000. Then came a big surprise.
The seller made a counter-offer of $90,000! I was stunned. My realtor found out that there was more wrong with the house, and the seller knew that as an investor, I would be willing to take it on. He had a job offer and really needed to move. I had a home inspector do an inspection, and he told me he wasn't sure if the furnace worked or not. Also, he told me the roof would need to be replaced in a year. That was 2004 and I literally had the roof replaced *today* in 2017! He was a bit off. I told myself that no one would live in a house without heat and bought the house. I was right and I was wrong.
I soon figured out that they had been heating the house with a gas fireplace! So, I gave back all of the $10,000 or so I had gained and had to install new heating and cooling, but now had a house with brand-new HVAC. This house also had no kitchen counter-tops, but I still managed to get it rented. I rented it for $950 a month, and my payments were only around $450, so it was very profitable. I went for an appraisal on the house and it came back at $110,000. I screamed and yelled that was too low, so the appraiser said, "OK" and made it $120,000. This was as the real estate bubble was getting revved up. Something like that would never happen today. I again refinanced, took maybe $20,000 out of the house and was ready to look for my next house.
Like many of my first properties, I skimped on the rehab, and a few years later had to go back and knock out the wall between the kitchen and dining room to create an open space kitchen and add a washer/dryer hookup. The house continues to be a great rental, it was vacant last month and somebody rented it the second day it was advertised.
Today, the house I bought for $90,000 is worth $158,107 (Zillow) with remaining mortgage of $86,591. It rents for $884 (after property manager takes his cut). My mortgage payment is $757 (it was interest only, but is now amortizing). Cash flow is $121 a month. Paydown is $281 for a total of $408 month.
My next house would prove to be much more ambitious. More on that when I get a chance.
