First Buy and Hold Success
Hi Everyone,
I finally can say my first rental is rented out. I decided back at the beginning of the year I wanted to get into Rental properties but did not have the money but really wanted to do this. Started cutting out as many expenses as possible and was able to save up enough for my first rental. I went from being the typical person living paycheck to paycheck to now only spending 55% of my paycheck by cutting out all unnecessary expenses.
After putting in around 10 offers I finally had one accepted back in June 2017 and did not close till the first week of August due to lender delays. Since it was a foreclosure there was a little money to put into the property than I initially thought. I did not know I had to pay all transfer taxes could not get any seller help etc.
The details on the property are the below:
-Purchase Price: $80,000
-Closing Cost/Taxes/15% down: $20,575.46
-Interest Rate: 5.25%
-Mortgage/Insurance/Taxes/PMI: $566.09
-Capex (10%): $129.50
-Repairs (5%): $64.75
-Rent Loss (8.33%): $107.92
-Rent: $1,295
-Profit per month: $426.74
-Yearly Cash on Cash Return: 21%
I had to make a few repairs to the home before having it rented out. I had to replace the Windows (x9) in the whole house, refrigerator, stove, light bulbs, paint, flooring in bedrooms and bathroom, few other miscellaneous things around the home which totaled just under $3,500 for all repairs. I actually estimated it would cost around $4,000 in repairs before I bought the home so I was a little under budget in that aspect.
Master bedroom floor before :
Master bedroom floor after:
I had to make a few repairs to the home before having it rented out. I had to replace the Windows (x9) in the whole house, refrigerator, stove, light bulbs, paint, flooring in bedrooms and bathroom, few other miscellaneous things around the home which totaled just under $3,500 for all repairs. I actually estimated it would cost around $4,000 in repairs before I bought the home so I was a little under budget in that aspect.
So far I am all in at $23,991.73 to this property. Now that I learned the whole process from this home I set the goal to have another house under contract by the end of the year. Will be selling my “weekend” car to purchase a second rental as I know I can use the rental income to buy another next year if I choose to.
I always loved reading the beginner posts as I knew they were in the same boat as me so hopefully this helps someone out there take the next step.
Thanks,
Zack