Just Purchased First REAL Rental Property
Hi fellow BP members,
I just got a notice from my RE Agent that an offer I made on a SFR in Kingsburg, Ca was accepted! Woohoo!
This is my second investment property but it will be my first "real" experience with renters since my first rental was purchased for my mom and her husband so I don't count that.
Some things that worked in my favor:
- Orig asking was 225k but house needs lots of work and it has termites
- Sellers (heirs of orig owners) dropped price to 199K after DOM started increasing
- Appraisal came in at 190k due to condition of house
- It has a separate mother-in-law unit (1bed/1bath) that is currently rented at $400/mo by the caretaker who took care of orig owners before they passed. He wants to stay.
- Its 107 year old house (2/1 + 1/1 side unit) on .5 acre
So what I did:
- Called my bro-in-law who owns his own pest control biz and lined him up to take care of termites for me
- As FHA loans would not close due to termites I watched DOM tick up-up-up-and up.
- Now kids are back to school and people are settling in for the cold harsh brutal California weather we are famous for. lol
- I then made an offer at 175K, cash, & caretaker gets to stay at current rent. They countered at 185. I said nope, 175. It needs a lot of work and since appraisal was only 190k I'm not exactly killin' it here. But its a good town that people are moving to since it's really nice. They accepted.
So far anybody that has read this far along, thanks. Also a BIG THANKS to BP and all of the members here for all of the info I was able to search for and learn on this forum. Everything from termites, roofs, CPAs, property management, all of it. I never had to ask a question since a simple search answered it 100x over.
But by far the coolest part was running the numbers in the Rental Property Calculator that showed how my investment would be a good deal overall. Very cool to see the numbers so clear and concise so I could make my decision.
So that's it. I'll ask 1200/mo for the main house, 400/mo for the side unit, 1600 total. Now begins the hard part, finding good renters!