Units 24 & 25 Bought Within a Week of each Other!

[Jim Shepard]

My wife and I just bought unit number 24 the week of Christmas. We have diligently been looking to add another SFH for the last year and a half. We either couldn't find anything that wasn't junk or couldn't put the numbers together. So we waited. Well number 24 popped up on the MLS and we jumped on it! Had all kinds of things replaced in the last 8 years. New roof, new sewer, new windows, HVAC, etc. Got a great price and the existing owner wants to stay there for 3 months after we close. Perfect! I don't have to heat it in the Winter during rehab which will be minimal (Paint, trim, new flooring, etc.)

I always get up early and get going so I don't wake the wife up.  :D  So Christmas Eve morning was no different and went out to check on our rental units.  As I was driving by one of our rentals a new for sale sign is across the street.  I text my realtor later in the morning and tell him I want to see the house the 26th.  (Normally I wouldn't bother someone on a holiday but he is a good friend and has been my mentor for 40+ years.  He also owns the agency so he gets 3%.) 

This was a newer house than #24 (1960 vs. 1985) but it needed more work.  The roof needs replacing at a cost of $5000.  Needs new flooring throughout the house at $3500.  Here's a new one for me.  Apparently the previous renters had a big dog by the big "Christmas presents" he left behind in the back yard.  He also must have been peeing on the air conditioner unit because there is a triangle on each corner where the fins are all gone - eaten up by the acidic urine!  It could be patched for around $2000  for a new a/c unit and an a -coil for new refrigerant but why patch a 30 year old air handler?  Replacing it with a new one for around $3500. 

So I typed up a letter for my realtor to give to the listing realtor to explain our low offer.  I should also mention that their listing said the magical words "motivated sellers".  I offered $70,000 which was $10,000 off their list price of $80,000.  They came back at $75,000 saying the sellers would still have to come to the closing table with money.   Not my problem!  I countered at $72,000 all in take it or leave it!  Got it!  

Both of these houses will make great rentals and should get $825 per month base rent.  I charge $25 per month per small pet and $25 for a refrigerator.  Potential for $900 a month!

I recently got a list off the internet for sayings.  I think my new favorite saying is appropriate for this deal..."The early bird gets the worm but the second mouse gets the cheese"!  Happy New Year BP!