$23,000 house
On the Bigger Pockets Podcast Show 29, I spoke about very low-priced houses that I'm buying in Milwaukee. In the show, Josh made the comment, "my neighbor just built a garage for $25,000" Other people have commented that $25,000 will buy you a nice car or SUV.
Can you really get a house for about that amount?
I just purchased a 2-bedroom single-family home on September 6. The house was originally available back in April/May 2013 as a short sale, then went to foreclosure. It was listed at $25,000 and I made an offer for $23,000 and the offer was accepted.
Okay, well what kind of condition house can you buy for $23,000?
Surprisingly, this house was in livable condition right off the bat. It had some cosmetic issues that I needed to address. Here are some pictures from before renovation:
I had a professional inspection done on the house and the inspector gave me the thumbs up. The house came with some nice features:
- Furnace was a newer high-efficiency (about 7 years old)
- Stove and refrigerator included
- Master bedroom had skylight and vaulted ceiling
- A significant portion of the plumbing in the house had already been replaced/upgraded
- Vinyl windows throughout
- 2.5 car garage with opener
Work that I did to rehab it:
- Painted the living room, hallway, second bedroom, and kitchen
- Replaced the kitchen floor with ceramic tile
- Replaced the basement windows with glass block
- Re-sided the garage
- Put a new door on the garage
And some other cosmetic fixes.
The tenants just moved in this past weekend and they love the house so far. The best feature is that it's very energy efficient. They were living in an 80 year old house where they had to crank the heat up to 90 and still had to run space heaters. The heat was only at 60 degrees and it was more than warm enough. They had asked their landlord to upgrade the windows and the landlord would not do it.
What does a $23,000 house rent for?
I'm getting $825 per month with the tenants paying gas/electric and taking care of the lawn care.
Overall, it's a great deal, but it did come up at a bad time as I was trying to rent out both units in a duplex and I still have another single-family home waiting in the wings for me to rehab. So I've been crazy busy getting this one up and running with everything else I've been doing. (And working a full-time job where I'm crazy busy there too!) But I would definitely do it again.
it is always nice to see people pay attention. I am happy to know that I had some influence in helping to generate new active members on BP.
I also want to point out that I certainly did not start out with million dollar deals, rather, I worked up to them and will now strive for 8 figure deals. Stepping stones my friends.
Update - a year later.
I've had one issue during the summer - ants. They decided to build a satellite nest in the house. I had the pest company come out; they did a couple of interior treatments spaced apart then an outside treatment in the tree area. That seemed to get rid of them.
I had put on a new garage door and about 2 months into their tenancy, the male tenant accidentally drove into the garage door. My garage door guy came out and said the way the damage was, the door could not be repaired; it had to be replaced. So I told my tenant he had to replace the door out of his own pocket. So he did.
The tenants have been great other than that one episode. They keep the house clean and presentable both inside and out and make on-time payments. A small issue was that the tenants were not married and they broke up, so the male was the one who left. I wound up re-signing a new lease with the female who's still there. (She had enough income to qualify on her own.)
I wound up going over the $5,000 initial rehab in additional expenditures because I decided to replace the garage door opener, and put new siding on the house instead of having it painted. I also got front and back porch lights for $25 (for both) and since the contractor who was doing the siding offered to put them on for free, I went ahead with them. I also replaced the side door on the garage. And then I had the front and back porch painted because they looked old compared to the new siding.
Re: ant problems, sounds like your infestation was major and required an exterminator. If you ever have a smaller ant problem, try this:
http://www.google.com/shopping/product/21623796735...
It works great.
Way to go again keep it up