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!
Congrats Jason. That's a nice property. We walked through it a few times. It has tons of potential. Great Buy!
Thanks @Jarrod Gregory this is the house I was telling you about when we had coffee. I'll let you know when I get the keys I'll invite you over to poke around the place.
@Jason Clark , congratulations on your purchase! I am glad you landed your first real deal.
From what you said it sounds like you are going to hold it long term. I am sure you've done your homework on the numbers but are you looking for cash flow or appreciation or maybe both?
That's fantastic! Congrats! And thanks for sharing the facts with everyone!
Hi @Yinan Q. Yes I plan to hold long term and keep as a rental unit. Appreciation is never a guarantee from what I've read (and saw in 2008) so my focus will be cash flow and then start rolling those funds into other properties in the Kingsburg and Visalia area.
Congrats - sounds like you did your homework and got in at a real solid price. Good luck
Congrats @Jason Clark . Can't wait till the day I can make a similar post about my first property. Cheers.
Congrats Jason Clark on first deal.
Congrats on your first buy! And here's to many more!
Bryan O., Note Capital | http://www.notecapital.us
Great job Jason, and thanks for sharing with us. Things like that will give the newbies like me a good push.
Thanks everybody for the cheers. It still amazes me that the sellers would not take care of the termites when FHA loans would not close. They essentially lost $50k over a $3500 termite job. That's incredible. But I'll take it! ;)
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