Skip to content
Welcome! Are you part of the community? Sign up now.
x

Posted about 9 years ago

History Deal #1

Start of the blog by revisiting each of my current properties and its current status and performance :

Deal #1 Fayetteville NC – July 1995

Purpose of buying – have lived in apartment first year of tour, and read in a book about how a good idea for young S/M would be to buy at every duty station, and once you hit 20 you would have a stable of rental properties to augment your retirement.Therefore decided to buy my first property and use the money I save over two deployments to Haiti. Looked in the local area around my apartment because I liked the neighborhood.Did not do any research on the area as far as school or crime, and thought I liked the neighborhood, was reasonably close to base and to downtown.Did not look at it through the eyes of a future renter, a lesson I would learn later on.Plus there was always the possibility I would be stationed in NC in the future, and it would be a good home base to live out of. I found the property by searching the MLS with a broker, and looking at a VA foreclosure.There was no real good internet search tools back then, so used MLS system in brokers office.

Put in bid and was accepted.67,000..6,700 down, financed 60300 at 7% (at the time a good interest rate.

Ended up moving in 1997 , and was able to find renter right away for $600 , which when you accounted for mortgage and PM fees, I was making a grand total of $30 month before other expenses.

Been pretty lucky with tenants , only had 4 for the time period of 1997-200, 2000-2009, 2-009-2012, and 2012-2014.Longest vacancy was 2 months in 2009, but otherwise has been solid rental until now.

Current status  - Current vacant since AUG 2014.

Rental rate $675  

Current value~ 98K

Rental rate - $675,

Mortgage -$0 !! House paid off Oct 012(goal was my 20- year mark ,and used extra cash flow from other rentals to pay off early).

Expenses taxes 1300 yar

Insurance 400 year

Property Mgmt 810 year

Maintenance variesusually couple hundred year to take care of fence / landscaping issues or to help turnover a unit

CAPEX – over 117 year period- replaced Water heater,bathtub due to leak, and recently had to tear down outside patio structure due its being old.– 7 K total for 17 years.

Way ahead with property -  TBD  have several options ..  1031 exchange of do a re-fi to get some cash for other REI.  first priority is to get tenant and get cash flow again


Comments (4)

  1. All

    Thank you for the Feedback and comments . 

     @Whitney Carpenter  

      think there are several reasons for the vacancy.   Old tenant did not move out unitl SEP 14, sp I missed the summer rush and have been trying to rent it out during the fall / winter, plus what I feel is not very agressive PM firm (I do use a property manager) , along with the fact the porperty hasnt been updated in 15 yeas or so.  thinking if by FEB 15  no bites  drop the price again ( I just dropped the rate to $650 to see any bites

    @Matt Deibel 

    @Scott Stevens 

     Thanks for the comments .  yes it is low rental rate for the amount of equity.  thinking of taking a refio instead of selling , but if  continues to struggle getting a tenant may change my strategy .  Thanks for comment about tenant in / out when selling , definetely a consideration


  2. First of all, it sounds like you're considering selling.  If this is the case it may be better to sell as an owner occupied instead of putting a tenant in!  With that price/rent, it would be very hard to get an investor interested.  I would take some time to look into the area, is there potential for more appreciation or does it look like house prices will stay relatively stable?

    If it was me I'd sell and 1031 (assuming you've been collecting on the depreciation the past 20 years), but definitely talk with a tax expert about this.


  3. you had said it's a 98k value and only 675 rental rate? Sounds like it may be time to sell, or is the 675 the market rate now?


  4. What do you think has changed to cause your vacancy? Have you considered dropping rent back down to $600? I don't know the area, just reading your situation makes me think they may help.

    I'm considering investing there. Are you using property management?