4/1 SFH

saw an REO property yesterday.

4/1, 1400 square feet two-story across from a school. Rather old...built in 1909. However it has updated electric, forced air heating. Rents will fetch $800/month, more with section 8. Needs about $4500 in work. ARV of $65k. Asking price: $21,900! SWEET! I immediately went to my agent's office and made a cash offer of $22,250. Supposed to hear back something today. I think the reason this house didn't sell sooner is because there were no pictures of the inside on the MLS. The inside is absolutely beautiful! Hardwood floors, ALL in great shape. Kitchen/bathroom are perfect. Large closets. Very impressive home that needs a paint job and a couple patches fixed in the plaster. The picture of the outside looks HORRIBLE. But all it needs on the outside is a good paint job. Got my fingers crossed on this one. I could have it rent ready in one weekend, then paint the outside when the weather warms up.

-Rich

Edited: 06/26/2010 at 07:09AM by Rich Schroeder

Rich Schroeder

Real Estate Investor · Wisconsin

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Feb 12 '09, 05:27 PM

Offer ACCEPTED!!! We close in two weeks!

Edited: 06/26/2010 at 07:15AM

Michael Rossi

Real Estate Investor · Ohio

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Feb 12 '09, 05:46 PM

Congratulations Rich! Sounds like you got a great deal!

Mike

Edited: 06/26/2010 at 07:15AM

Josh Green

Banker · Tampa Area, Florida

965 posts
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Feb 12 '09, 07:04 PM

congrats rich! would love to see some pics!

Edited: 06/26/2010 at 07:15AM

Rich Schroeder

Real Estate Investor · Wisconsin

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Feb 12 '09, 08:28 PM

here's a pic I took of the outside. I'll get some up of the inside when we do the inspection.

Edited: 06/26/2010 at 07:15AM

Kirk B

· Select a State

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Feb 12 '09, 10:41 PM

Im new here so consider this reply more of a question than criticism.

The roof looks old and is missing shingles. It definately need to be re-roofed. it looks like it needs to be painted. You mentioned $4,500 in repairs. Do you plan on roofing and painting? Will you do this yourself?

If I am using this site's 50% rule correctly, the property will +CF $220!

Seems like a very nice buy. Congrats.

Edited: 06/26/2010 at 07:15AM

Rich Schroeder

Real Estate Investor · Wisconsin

452 posts
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Feb 12 '09, 11:23 PM

good questions! Yes, I will do the repairs myself. Actually, I just found a neighbor that does roofing! HEE HEE! The pitch is very steep on this house, so I'm going to patch and then replace later on down the road if need be. Hard to believe, however the roof currently does not leak.

-Rich

Edited: 06/26/2010 at 07:15AM

Just Don

485 posts
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Feb 13 '09, 05:02 AM

good buy!!

Not critical,just asking,,,how long does a paint job last there??

Edited: 06/26/2010 at 07:15AM

Rich Schroeder

Real Estate Investor · Wisconsin

452 posts
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Mar 01 '09, 08:06 AM

WHEW! What a long weekend!

Closed on Friday at noon. Put in baseboard heating in this weekend. I'll tell you...running wire through these old houses (with modified foundations) is tough! Next is plumbing, then cosmetics. The very first thing I did was put a "for rent" sign out. Got 2 calls on the first day! One lady says she wants it for sure. She passed my screening. Just waiting to see if she'll fork over the money!

I'm really tired, and going to spend some long awaited time with my wife and kids.

So far so good!

Edited: 06/26/2010 at 07:25AM

Hermann L.

Real Estate Investor · Castle Rock, Colorado

13 posts
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Mar 01 '09, 08:16 AM

Congrats! Just curious, did you use your own cash or use OPM?

Edited: 06/26/2010 at 07:25AM

Rich Schroeder

Real Estate Investor · Wisconsin

452 posts
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Mar 01 '09, 07:19 PM

Originally posted by Hermann Li

Congrats! Just curious, did you use your own cash or use OPM?

I used my own cash. I will be using my own cash for the rehab, too...then cash out refi.

Thanks
Rich

Edited: 06/26/2010 at 07:26AM

Rich Schroeder

Real Estate Investor · Wisconsin

452 posts
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Mar 13 '09, 03:17 AM

Ok, it's been exactly two weeks since I purchased this home. It's almost complete. A very stressful two weeks, I might add! I've learned quite a bit already...

-baseboard heating doesn't work well in a huge poorly insulated house with 9 ft ceilings.
-Other people don't do work as well as I do

good things:
-I found a couple great contractors in my area that I will work with for a long time to come
-my wife is exactly who I married...the understanding and supportive person that I need her to be
-I'm more resourceful than I thought I was
-I'm not the smartest person, but I'm also not the dumbest person
-Thanks to MikeOH I was patient enough to buy at a really good price. That cushion will save my numbers!!!

Tomorrow I'm having an open house viewing, 8 people are scheduled to show up. I'd be happy with just a couple people. Let's see if I can get it rented by 4/1 and do my cash out refi to do it all over again!

Edited: 06/26/2010 at 07:34AM

Just Don

485 posts
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Mar 13 '09, 03:53 AM

You said in original post it had forced air heat. Then you said you ran wires and installed baseboard heat?? Why was this a repair?? Furnace old or non working?? Why not replace with another furnace (preferably gas of course).

IF the house is large and uninsulated,,,are you concerned the heating bills will be too high and all the GOOD renters move out for cheaper heat??

'I' would spend a few dollars on blown in insulation,some decent windows and permanent siding,,,then its pretty easy to KEEP those that otherwise pass on these old houses!!!

Edited: 06/26/2010 at 07:34AM

NC Mark

Real Estate Investor · North Carolina

1,086 posts
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Mar 13 '09, 07:35 AM

Blown-in insulation is labor-intensive but easy to do. I always put it into my attics and try and do the walls, too.

Siding's more expensive but you'll never have to paint again.

Just Don is correct that you won't keep good tenants if their energy bills are too high.

On the other hand, those 9-foot ceilings are great in the summer!

Edited: 06/26/2010 at 07:34AM

Michael Rossi

Real Estate Investor · Ohio

4,587 posts
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Mar 13 '09, 08:18 AM

There was FIVE BILLION DOLLARS ($5,000,000,000) in Obama's latest giveaway for weatherization. Another one of my duplexes is scheduled to be weatherized soon, courtesy of the American taxpayers. SHARE THE WEALTH BABY!

Edited: 06/26/2010 at 07:34AM

Rich Schroeder

Real Estate Investor · Wisconsin

452 posts
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Mar 14 '09, 05:08 AM

Originally posted by Just Don

You said in original post it had forced air heat. Then you said you ran wires and installed baseboard heat?? Why was this a repair?? Furnace old or non working?? Why not replace with another furnace (preferably gas of course).

IF the house is large and uninsulated,,,are you concerned the heating bills will be too high and all the GOOD renters move out for cheaper heat??

'I' would spend a few dollars on blown in insulation,some decent windows and permanent siding,,,then its pretty easy to KEEP those that otherwise pass on these old houses!!!

it did have forced air heating, old furnace. Cost of putting in a new furnace: $3000. Cost of putting in baseboard heating: $720. I gave it a shot and it didn't work. So I put a new furnace in. The house is insulated, just not very well. No need to spend the money on new insulation. I've kept track of the furnace, and it heats the house just fine (no excessive running). Still have a couple windows to fix (minor repairs) and all is good.

Edited: 06/26/2010 at 07:34AM