SFR Rental Property #3 Acquired - Plan Accelerated
I just paid for my newest rental. It's in a quickly-improving neighborhood that was a D neighborhood two years ago, is probably solid C now with downtown and near-downtown gentrification moving in from two directions and what I'll generously call "opportunity" properties still on the other direction. In a year or two, this home will probably be in a solid C+ or B- area.
It's a tidy little 3/1 brick, built in the 60s, that doesn't need much work. Needs new gutters, facia board work, plumbing check, carpet, appliances, and minor kitchen work. Oh, and I'll probably have a huge tree taken down in front of the house -- I don't think the insurance company will insure the house with that menace on the property. Already has vinyl windows. I have my guys lined up to begin work next week. Barring bad news with plumbing and electrical, I'm guessing on a $6K budget and about three weeks.
I got a steal of a deal as the home cost only $9K. I'll be all in at $15K. The rent should be $750-$825. If gentrification engulfs this neighborhood as I expect it will, 2017 rents may be in the $1000-$1100 range.
I could probably sell for $40K today, and $55K after my minor updates. Gentrification has already taken over the area 3-8 blocks away. There, this home, once updated as I plan, would probably go for $75K today. I plan on holding it long term and renting it for decades to come.
Coming into 2015, I hoped to buy one property by spring, and hoped against hope that I could get another around Thanksgiving. Seeing as this one came so cheaply, I've altered my plan. I think I'll get a second in 2-3 months, and try for a third by November. By the end of the year, I could own four properties outright and only be carrying a small loan for the fifth. If I can achieve that, my fifth SFH rental overall, that should set up a very exciting 2016.
Sorry for the long post, but I'm an excited little REI puppy.
I hope to post pictures in the next few days.