i closed on a 4/2/2 rental yesterday. the house is in good condition, just needs a lot of cleaning up (the people had 3 big nasty dogs inside)and paint-n such. biggest expense will likely be new a/c unit. but overall nice place in a decent, developed area in east houston.
i financed about 40k at 4.8%interest with 20%down.
hopefully it will be ready to rent in about a month. rental comps are $1,100.
thanks BP for all the information that helped motivate me.
Sounds like a great deal! Congratulations Daniel.
Nice one. Seems like a great deal.
Congratulations! It's always good to hear about successes. I'm also in the Houston area. I'd appreciate it if you could pass on a good reliable A/C contractor I will need for one of my deals.
All the best for 2012!
Well done! is this your first investment property?
I will be looking to make my first deal in Houston in about 6-8mo.
congrats on the rental..what was the purchase price?
Jamie, what area of town are you in?
Sam, yes first investment property
Bryan, PP was ~55K
Way to go Daniel!
Keep us posted as to your rehab and leasing.
Awesome!!!!! 1st of many daniel!!!!!!!!!!!
So you're 15k (55k purch, 40k financed) into the property plus it sounds like you're paying rehab out of pocket too although its minor with the A/C exception. 25k out of pocket total?
Mortg payment about $200 plus taxes and insurance another $250/mo? Rent 1,100. $100- to 150 for repairs/vacancies (conservative). Making 500 to 600 per month net cash flow.
25 to 30% returns. Not to mention the equity you captured and the debt paydown you'll have every month.
Why isn't everybody with money to invest doing this again? :-)
Congrats on your deal!
Great terms on your loan. In Chattanooga, I've seen 15 year notes at 4.99% for personal loans and 5.24% for loans to an LLC, 20% down. Did you get the loan in your LLC or personally?
You might already know these ideas but here are a few things I didn't do with my first deal but now have as part of my post closing system.
- Call your title company in a week or so to thank them for helping expedite the deal and make sure they dispersed funds, especially for taxes and insurance.
- Draw up a prioritized punchlist with deadlines and start following your plan. I often hold off on a few non-essential items and wait until I get the first month's rent then have that money pay for the final items.
-Be careful not to over or under rehab. It's an art and a science. You might solicit local investors for their opinions.
-Even if you are using a property management company. Meet the neighbors as you go by the property. Tell them you are looking for a good tenant and will give them a referral fee if they bring you a qualified applicant. By the way, I never disclose that I own the property. I "help" the owner. Technically, I am helping the owner because I buy with an LLC.
- If you bought a foreclosure, count on a few months of heavy repairs once you place a tenant. Warm bodies often find a few things that everyone missed in the inspections, particularly with plumbing.
Good luck. mck
MCK- 30 fixed for 4.8%, personal not LLC, once the dust settled the deal got escrowed- which i personally dont mind but i didnt request it, i figure they thought it best because im young idk..
Originally posted by Daniel R.:
MCK- 30 fixed for 4.8%, personal not LLC,
*jealous as hell*
Wish June would get here faster to finish seasoning my short sale so I could get conventional funding... grrrr!
I like your terms, particularly the 30 years.
I'm not sure what you mean by "the deal got escrowed". Did the bank escrow your rehab costs? The banks usually escrow taxes and insurance. I have had one bank escrow my rehab costs. It took a bit to get the inspector to come out, confirm the rehab then get the bank to release the escrow money back to me. Be careful to keep every receipt to show the bank if for some reason you have an issue with the inspector, etc.
You might have meant that the bank sold the note to another bank? mck
bank escrowed taxes and insurance
Great deal....what part of Houston is the property in?
Great job Daniel!
Do you know of any other deals in the area? Did you find this on your own or a wholesaler?
Ben and Brandi- the east side of houston and yes there are deals but are there not deals in most areas, foreclosures are still rampant.
congrats on the awesome deal.
how long b4 you pulled the trigger on this since this being your first investment?
Phrash- i bought my primary residence 2 years ago (which i rent 3 rooms in bc im single) and was planning to buy an investment property for about a year (chose to raise proper cash before).
One idea would be to buy another residence (or duplex or 4-plex) with an owner occupant loan and live in it yourself and rent out another room or the mother-in-law suite to someone. You could keep your initial house and rent out your room there. I think you have to live in one residence a certain number of years before you can get another owner occupant loan. mck
Congratulations Daniel, Good luck on your next deal !
Congratulations, Daniel. Way to go on what sounds like a very nice deal!
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