#17 rental was purchased today

22 Replies

just closed on #17. here are the details..

~1,085 sq. ft
-64k (asking was 69.9)
-2 beds, 1.5 bath (converted from 3 beds and going back to 3 beds)
- 1 car garage, car port and a shed in the back

major work - roof, skylight, paint cabinets, countertop, kitchen floors, bath update, put up a wall for a 3rd bedroom. maybe refinish the hardwood - budget? whatever it takes to make it nice

taxes - around 2,600-2,800, who knows what they will jump to
insurance - around $625 per year
area - C+ to B-

expected rent - $1,100-$1,150

here is a picture of the outside

Congratulations!

What is the reason for changing it back to a three bedroom? I'm guessing because it gets you higher rent?

wendy, 95% of the people look for 3 beds. the other 5% want to spend more money.

it's in westland.

good for you George! Looks like you found a deal, I know you said the MLS was dry, was this on the MLS or did you find a wholesaler?

Good find, @George P. .  

Wow, 17 properties!  You're chugging right along.

@George P. congrats! Can you share how you are financing your properties - all cash, portfolio loan, OPM ??

Originally posted by @Hillary Van Dusen :

good for you George! Looks like you found a deal, I know you said the MLS was dry, was this on the MLS or did you find a wholesaler?

 hi hillary, how have you been? i was thinking about you guys the other day. give me an update on your ventures!

this one was MLS. i can't find a wholeseller in my area at all.

Originally posted by @Gautam Venkatesan :

@George P. congrats! Can you share how you are financing your properties - all cash, portfolio loan, OPM ??

 the last few have been from a credit line. we mortgaged a bunch earlier this year and have access to a credit line. it's definitely gotten easier to purchase the more you have. we can also do conventional mortgage as well since the bundle is under a commercial loan, thus does not acount toward the "10 max" rule.

Wow!  17 properties is mighty fine.  Well done!  As always, the financing part is of interest to the community, so thank you for your transparency in that regard.  Financing the bundle of properties with a commercial loan is a good plan...so good a plan, that I need to go look into it.  :D  All the best~

Looks like a really good deal, congratulations!

Wanted to update everyone on the progress. 

Completed the project and it turned out really nice. It's in a C+ area and the first 1.5 weeks we had 52 showings. We had 5 applications as well. 4 are crap, one is 95% for sure going to get it. No, the price is not too low. I know the market very well.

Rent is $1,150.

Here are some before and after pics

it was a lot of work and a lot of coordinating. with my full time job and this house being opposite direction of work and home, it took a lot out of me. i need a vacation!! but i can't cause number 18 or 19 is waiting to be worked on.

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

Great before and after photos. My only comment is why would you get rid of that AWESOME ceiling fan in the kitchen?!?! lol. Great job, numbers look solid and will be a great rental for you!

Originally posted by @Ryan Billingsley :

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

we have a LOC and use it as cash to purchase. When it runs out (lets say we get 3 with the LOC), we combine the 3 under one loan (at 75% LTV) and refill the LOC again. the LOC is at 4.5 % interest only, so the faster we pull the loan (20 yr at 4.95%), the better it is.

this way has helped us grow significantly. otherwise we would have to wait for months to save up the cash!! just last november we were at 14, i believe. i just signed the PA for #20 last week, still need a thread about that. :)

Originally posted by @George P. :
Originally posted by @Ryan Billingsley:

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

we have a LOC and use it as cash to purchase. When it runs out (lets say we get 3 with the LOC), we combine the 3 under one loan (at 75% LTV) and refill the LOC again. the LOC is at 4.5 % interest only, so the faster we pull the loan (20 yr at 4.95%), the better it is.

this way has helped us grow significantly. otherwise we would have to wait for months to save up the cash!! just last november we were at 14, i believe. i just signed the PA for #20 last week, still need a thread about that. :)

That's very impressive. When you combine the three at 75% LTV, what are you using as your lender? Is it based on the ARV? I assume your LOC is unsecured?

Nice before/after pictures. 

How much was spent on renovations and what do you think the ARV is now?
And do you plan on cash-out refi'ing? 

Originally posted by @Alex W. :

Nice before/after pictures. 

How much was spent on renovations and what do you think the ARV is now?
And do you plan on cash-out refi'ing? 

 as always, i spent much more than i thought initially. i am really bad at estimating. i use cheap labor and i still can't keep it within my initial estimations of 14-16k. i had to do concrete (had no idea it had a rotten deck and sloping porch). so i spent around 22. so my total cost is ~86k. i think i can get around 110k right now in that area.

but i dont want to sell. even if i spent too much, i care about those monthly checks that come in rather than a one time check. i can quit my job with those checks, i can't quit it with just one check of 30k.

Originally posted by @George P. :
Originally posted by @Ryan Billingsley:

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

we have a LOC and use it as cash to purchase. When it runs out (lets say we get 3 with the LOC), we combine the 3 under one loan (at 75% LTV) and refill the LOC again. the LOC is at 4.5 % interest only, so the faster we pull the loan (20 yr at 4.95%), the better it is.

this way has helped us grow significantly. otherwise we would have to wait for months to save up the cash!! just last november we were at 14, i believe. i just signed the PA for #20 last week, still need a thread about that. :)

Nice work! You're right where I want to be! :) So the LOC, is it just a standard line of credit, or anything special about it?

Also, how long did it take you to go from say 1 unit to 17?  I'm always curious how people got their start in things and more importantly, how they grew to where they are. :)

Originally posted by @Travis Beehler :
Originally posted by @George P.:
Originally posted by @Ryan Billingsley:

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

we have a LOC and use it as cash to purchase. When it runs out (lets say we get 3 with the LOC), we combine the 3 under one loan (at 75% LTV) and refill the LOC again. the LOC is at 4.5 % interest only, so the faster we pull the loan (20 yr at 4.95%), the better it is.

this way has helped us grow significantly. otherwise we would have to wait for months to save up the cash!! just last november we were at 14, i believe. i just signed the PA for #20 last week, still need a thread about that. :)

Nice work! You're right where I want to be! :) So the LOC, is it just a standard line of credit, or anything special about it?

Also, how long did it take you to go from say 1 unit to 17?  I'm always curious how people got their start in things and more importantly, how they grew to where they are. :)

 we started in the winter of 2010 and it's been a blur after the first 4. we got the first one in march of 2010. second was in  December of 2010. 

2011 - we got 2. 
2012 - we got 2.
2013 - we got 3
2014 - we got 6
2015 so far - we have gotten 5 and have 1 under contract.

we had no idea what we were doing in the beginning in terms of the person on the loans, so we were both on them, even though we could have gotten them with either of us. that slowed us down a bit since we hit 4 loans and had to find banks that could do 5-10. then we stalled again trying to find banks that could do 10 for me and 10 for wife (that's where it hurt us that both were on the loans for the first 6.

then we just said, screw it, let's look for a bank that give us a LOC. after 55 calls to local banks, i found one that took 7 of our homes under a 20yr 4.95% and gave us the LOC. that's been super helpful.

To answer a previous question, i dont like to refi and pull money out since i want to have a large cushion of equity. we can always pull money out, but i dont mind struggling and finding ways to get the next one with what we have.

i had to get 50k out of my 401k and borrow 60k from family which is being paid off now.

but nothing could have happened if we didn't have good jobs. that's why it's stupid to quit your 8-5 too early in the game.

Originally posted by @George P. :
Originally posted by @Travis Beehler:
Originally posted by @George P.:
Originally posted by @Ryan Billingsley:

Congrats!  What is your strategy to purchase?  Buy cash, rehab cash, rent, then refi?  Or do you leverage from the beginning?  Or something different.

Thanks

we have a LOC and use it as cash to purchase. When it runs out (lets say we get 3 with the LOC), we combine the 3 under one loan (at 75% LTV) and refill the LOC again. the LOC is at 4.5 % interest only, so the faster we pull the loan (20 yr at 4.95%), the better it is.

this way has helped us grow significantly. otherwise we would have to wait for months to save up the cash!! just last november we were at 14, i believe. i just signed the PA for #20 last week, still need a thread about that. :)

Nice work! You're right where I want to be! :) So the LOC, is it just a standard line of credit, or anything special about it?

Also, how long did it take you to go from say 1 unit to 17?  I'm always curious how people got their start in things and more importantly, how they grew to where they are. :)

 we started in the winter of 2010 and it's been a blur after the first 4. we got the first one in march of 2010. second was in  December of 2010. 

2011 - we got 2. 
2012 - we got 2.
2013 - we got 3
2014 - we got 6
2015 so far - we have gotten 5 and have 1 under contract.

we had no idea what we were doing in the beginning in terms of the person on the loans, so we were both on them, even though we could have gotten them with either of us. that slowed us down a bit since we hit 4 loans and had to find banks that could do 5-10. then we stalled again trying to find banks that could do 10 for me and 10 for wife (that's where it hurt us that both were on the loans for the first 6.

then we just said, screw it, let's look for a bank that give us a LOC. after 55 calls to local banks, i found one that took 7 of our homes under a 20yr 4.95% and gave us the LOC. that's been super helpful.

To answer a previous question, i dont like to refi and pull money out since i want to have a large cushion of equity. we can always pull money out, but i dont mind struggling and finding ways to get the next one with what we have.

i had to get 50k out of my 401k and borrow 60k from family which is being paid off now.

but nothing could have happened if we didn't have good jobs. that's why it's stupid to quit your 8-5 too early in the game.

 Ah ok that makes sense.  Yeah, I'm trying to get as many properties as I can, as quickly as I can, and coming up with the requisite 20-25% down is a wee difficult at the moment.  I am in the final stages of a 4 house deal that will net me a little less than $1,600 a month, but even then, it'll take me about 4-6 months to save up for the next down payment.  I'm hoping to get to a point where I am buying houses every month or so. :)  

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here