$112K RETURN- HUMBLED AND WISER NOW
How I made $112,000 on the sale of my rental property that I purchased in 2007!!!
Purchase (2007): $165,000
I lived in the house for 5 years, renovated kitchen, baths, and converted a screened porch into a bonus room ($30,000/150hrs of my time). Moved to Seattle and rented the house out to a great tenant (until he caught the back yard and my neighbors fence on fire!) Moved back into the house for 18 months, fixed a few more things, then moved into our second home and rented the house to a "friend" (bad idea!). Only a bad idea because my gut told me not to trust him, but I did anyways and lost a few thousand dollars (humbled), then I improved my tenant screening methods, picked a very qualified tenant and had a great experience- because I took the time to be professional, raise my rent, got more proactive and clear on my expectations (wiser now). After all expenses: I profited $11,800 in rent over these 3 tenants, who also paid down my mortgage (approx) $30,600.
Got my real estate license earlier this year, then without knowing anything about how to list a home, took some pics, wrote a nice description and sold the house for: $265,000- realizing a profit of $112,000. By having my RE license I saved $7950 on the sale. I could have sold the house 6 months earlier with an agent when the market was not as hot but only have made $50,000. Couldn't have done it without my awesome team, @Chris Flynn, and my amazing wife!!!! (our three kids also helped in their own way. ha)
Lessons learned:
-Be ultra clear on your expectations to tenants and contractors.
-Never let doubts, fear, people's opinions or the pain of losing money creep in and steal your joy.
-Buy low, fix it on a real budget and sell high
-Don't rent to friends, family or anyone you don't trust
-Don't do business with arrogant people
-Stay the course, get laser focused and stay the flipping course!