Another Rental Property! (This time a townhouse)

92 Replies

Okay, so I just posted back a couple of months ago regarding a 3 bedroom single family I bought on July 15th.  But, I had the opportunity to buy a 3 bedroom townhouse.

This deal actually started back in May! I visited the property as the owner had purchased from an older woman and basically wanted to flip it. So he listed it on Craigslist for $20,000. I went through, and saw that the property needed some work and the HVAC was older as were the appliances, so I offered him $16,000. He said no and that he would list it on the MLS.

So June goes by, he hasn't sold it yet. 

July goes by and he hasn't sold it yet.

August comes about and I follow up with him and let him know that I'm still willing to buy it for $16,000.  He says no, but offers it to me for $18,000.  I say no can do.

September rolls around and I again email him and offer $16,000.  He said he would do it for $16,500.  I stand firm and say no, $16,000 is my price.  (I wasn't budging even for $500!)

Now October rolls around and he says he will agree to my price of $16,000.  So we get everything arranged with the title company. There was a slight delay on closing because the condo association didn't get the paperwork to the title company in time, but it wasn't that much of a delay.

After closing I got the contractor in to get the work done that needed to be done (flooring, trim around the door, and some drywall fixes).

Now I'm having some showings (I have one tonight actually).  My goal is to get it rented on or before December 1st.

Here are some photos:

Kitchen - stove and fridge were included

Basement - washer/dryer were included

Half bath on main floor

The unit is 1,054 square feet and all 3 bedrooms are large enough to fit king sized beds.  The windows are all newer double-pane vinyl.  The carpeting is older, but other than being cleaned it should last several more years.  The windows all came with blinds or curtains.

You are a hard bargainer, Dawn. How much will it rent for? Any HOA fees?

Originally posted by @Jon Klaus :

You are a hard bargainer, Dawn. How much will it rent for? Any HOA fees?

Rent will be $725/month + utilities.

HOA fees are $205.30/month for 10 months, then $188.50 for 2 months, and then the next year cycles.

Property taxes are $306.61/year and insurance is $228/year.

After expenses and putting money away for reserves (repairs, maintenance, and vacancy) I expect to cash flow about $300/month.

That's awesome. See what happens when you stick with your price that you set. It took a while but you got it. Looks great too.

That's great! I take it u are managing it yourself?

You're going to cash flow $300/month on this buy and hold deal and you wouldn't budge the last $500.?   Way to stick to the plan.  I'm too soft.  Congratulations on a great deal. 

Originally posted by @Reggie Maggard :

That's great! I take it u are managing it yourself?

 Yes, I manage all my rentals myself.

Originally posted by @Gregory Zanolini :

You're going to cash flow $300/month on this buy and hold deal and you wouldn't budge the last $500.?   Way to stick to the plan.  I'm too soft.  Congratulations on a great deal. 

 Yeah, it's definitely tempting to just give in for $500. Believe me, I was tempted!  But $500 is my repairs cost, so I'm glad I didn't give in.

I am coming to Milwaukee!

Other investors could not see the opportunity you were able to obtain with this investment.   Congrats 

Congratulations you put in the work you deserve the pay. 

Wow, a 3 bedroom townhome for less than 20K. Talk about affordability.

@Dawn Anastasi  

Congratulations.

The pictures look nice.

Seems to be a high quality purchase.

Thank you for sharing your success.

Are you working on other, similar leads?

Congrats Dawn!  Way to have persistence and patience!

Wow! Good job Dawn. What an amazing price to pick up $300 in cash flow.

In other news, I am moving to Milwaukee!

Just kidding

Nice work Dawn.  NW side of Milwaukee has a lot of condos and townhomes, I've always been curious how they would work as rentals and if there is ever any conflict with the condo associations.  Let us know how it goes.

Originally posted by @Dan C. :

Nice work Dawn.  NW side of Milwaukee has a lot of condos and townhomes, I've always been curious how they would work as rentals and if there is ever any conflict with the condo associations.  Let us know how it goes.

 This is actually my second townhouse condo in this association.  I picked up the first one back in April with a woman from Canada.  Other than the high association fees, the condo has been a good source of cash flow.  The condo association does allow rentals, however they are pretty strict on criteria on who they accept (they have their own screening).  Plus, renters are not allowed to have pets.

Welcome to BP.

Great job @Dawn Anastasi

You are an inspiration to a lot of people. $16,000 purchase price and $725 rental income that is more than 4% of the rental income. It's a fabulous deal.

Thanks for sharing with all of us.

Originally posted by @James Syed:
$16,000 purchase price and $725 rental income that is more than 4% of the rental income. It's a fabulous deal.

Thanks for sharing with all of us.

Actually I would count this as a 3.15% deal. First I take the rent and subtract the HOA fee. Then I divide by the purchase price + the rehab.

I see. Just curious, how much was your acquisition cost?

I paid 55k per unit, you paid 16k, and we get the same rents.

I tip my hat to you.

I'm doing this wrong,

Maybe fellow landlords are right, I need to raise my rents.

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