BiggerPockets

Congrats on the close, Kel. What's the plan now? Fix/flip or rent it out?

Thanks guys,

The plan is to rent it.

That is a cute house! Care to share purchase price, your rehab costs and potential rental income? Thanks!

30k cash including closing cost. The bank was asking $39,900.

We estimate no more (hopefully) than 3k in repairs since we will do the bulk of the repairs ourselves like installing the kitchen cabinets/counters.

Rents in that area for this size home run around $575 - $650. So we'll try somewhere in the middle of that.

This was the house that a lot of the guys here didn't think was such a good deal as far as the numbers. Unfortunately though the great deals that are priced in the 15k-20k range need an enormous amount of work. We did bid on one that is in this same school district, they had just lowered it several times from $29k, to 19k down finally to $14,900. But that one needed a huge amount of work and they ended up with multiple offers and didn't accept ours. Not that we won't stop looking for those awesome deals though (:

The story on this house was I saw it on the Fannie Mae site. It was listed as pending. I didn't see it on the MLS however or on any of the local real estate sites. I took a chance and called my realtor about it and she checked and even though it said pending it literally just became available again. What happened was someone put in an offer but they ended up unable to get financing. So we found it before it went back on the MLS.

In any case, buy, hold and rent is our long term goal. And hopefully by retirement time we'll see a return on the investments and more positive return.

Kel,

Congrats on the find. It's little pricey for me with that rent, but if you manage it correctly, you see an ROI.

Tom

"they had just lowered it several times from $29k, to 19k down finally to $14,900. But that one needed a huge amount of work and they ended up with multiple offers and didn't accept ours"

I noticed that banks are doing it a lot recently. Several times I followed REO prices drop from $30K-35K to $15K-17K and ended up with multiple offers. I had couple of them myself. The first one I offered a full price +$200 thinking I would beat the competition, but lost it to a higher offer. Thinking I leaned from the mistake, I offered more then $2,000 over the asking price on the next one but still got beat.
I think the strategy on the bank's part is to create a frenzy.
However, I managed recently to close on a great house, beating the bank's on its own game. They reduced the price all the way down to $13,200. But there were no offers higher Mine was $12,000 which was accepted. Inspection already done, The house needs cleaning, paint, AC recharge, tree trimming and maybe a fence in the back. Estimated work - $3,000-$4,000. House is closing on July 10.

Where on the fannie mae site can you find home listing? I must be overlooking it. Where do they rest of you guys find your deals?

I like your second house! Do you have any updated photos?

That is a nice large tree in the backyard. But due to the way it grew, it is prone to failure. It appears it has been pruned in recent years. If you know a good certified arborist let them look at it. They may be able to cable it to keep it strong.

I learned this sort of thing the hard way. I had to take out two huuuuuuuuge trees that died and it was expensive. $2,800!!! They had diameter of close to 48" each.

I am told the V makes it weak. When the treee is young it is best to prune it to avoid this growth.