I am up to 10 now after buying my first rental December of 2010. I bought this home for $99,917, it is a 3/2 built in 1956. I used a 5 year ARM at 4.1725% with 20% down from my portfolio lender. I think the home will rent for $1,250, but we will see. This town is about 10 miles from me and has less than 5,000 people. But the town is very close to the booming oil fields and there has been nothing for rent. The last two places for rent were a $600 a month bedroom in a house and a $700 a month studio. They both rented right away.
This house was bought off of MLS and seller paid $2,000 in closing costs. I actually bought it March 19, but I was in Mexico and forgot to post details on it! It needed about $2800 in work which is complete and we put it on Craigslist today.
I have a lead on number 11!
Way to go Mark!
Congratulations! That is quite an accomplishment.
Way to go bud. You should buy a new rental every time you cash your profit check from a flip. If you do you will reach your goal of a hundred in only a few years. What I like about your houses is they are all high quality, not the junky 50 or 60K ones I buy that need rehabbed. Your rents run double to mine too so technically it costs you less to put a new roof on as it is only 4 months rent for you to do so while mine are like 10 or 12 months in costs. I'll try to call next time I head through Greeley and maybe we can have a cup of coffee. Keep going and don't forget to have fun doing it.
@Jerry W. I wish I could find that many great rentals. I am finding that great rental properties are harder to find than flips because of my strict criteria for buying. Plus I have to pay taxes on the flip money so it doesn't usually equate to enough to buy a rental straight up. Let me know next time you are coming to the area.
@Mark Ferguson you don't need enough to pay for a rental, just 20%, let the bank do the rest. I love that 4.1725% interest. My last buy was 5% and I am worried about that increasing.
@Jerry W. I make 25 to 30 thousand on an average flip. I figure after taxes that leaves me with 15 to 20 which would cover the down payment but not repairs. I have been lucky the last couple purchases in that they didn't need much work.
Inspiring! Glad to hear you keep moving forward. It's fun to follow along with your progress.
You may be able to defer taxes on your flips and invest all of the proceeds into new rentals through Section 1031 exchanges:
I was wrong, it is 4.5% interest rate. $476 payment with taxes and insurance.
@Gerald K thank you!
I believe you have to hold a property for at least a year to complete a 1031 exchange. Maybe some of the 1031 experts can chime in.
There is no specific holding period. The Regulations require that you have the intent to hold for rental/investment. Advisors often recommend 12 months or 24 months, but as long as you can prove that you had the intent to hold you will qualify. Properties held for sale (flip) are not held for investment but for sale (inventory) and do not qualify for 1031 Exchange treatment.
thank you @Bill Exeter
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