Rental Property Investor · New Braunfels, TX · Member since 2021 · 291 posts · 257 votes
We bought this house in 2020 for $70,000, we put $65,000 into the rehab. We have gotten $73,800 in rent since then. We just sold it for $240,000. Was it a good deal?
Mike, that is a strong deal. You forced appreciation, generated solid rental income and exited with a significant profit. That is exactly how you build wealth in real estate.
Mike, that is a strong deal. You forced appreciation, generated solid rental income and exited with a significant profit. That is exactly how you build wealth in real estate.
@Mike Kirby, on the surface it sounds like a strong investment. What did your actual profit look like after all expenses, and what was your IRR? Even if the cash flow wasn't amazing, ~12% annual appreciation after the rehab is no joke. On the surface, I'd take that all day long.
@Mike Kirby, on the surface it sounds like a strong investment. What did your actual profit look like after all expenses, and what was your IRR? Even if the cash flow wasn't amazing, ~12% annual appreciation after the rehab is no joke. On the surface, I'd take that all day long.
What's your concern that led you to posting?
Actual profit was way more than we put into it. That’s really all that matters to me.
Thats a solid outcome. You bought at $70k, rehabbed for $65k (total $135k all-in), collected $73.8k in rents, and sold for $240k. Your total return on a $135k investment is $105k profit (if we back out the rent), which is about 78% return over 6 years. Thats not bad, but heres what jumps out -- you made most of your money from appreciation, not from cash flow or the initial purchase.
Breaking it down: $73.8k in rent over 6 years is only about $1,230/month average. Thats thin margin on a $240k sale price. The real win was the market moving. In a flatter market, youre looking at a much tighter margin. Your rehab was solid at $65k on a $70k acquisition, which suggests good contractor relationships and execution.
Heres the question -- did you actively manage this as a rental or let it ride? And would you do the same strategy again in todays market, or are you shifting toward faster flips given how much of your profit depended on the appreciation?
Thats a solid outcome. You bought at $70k, rehabbed for $65k (total $135k all-in), collected $73.8k in rents, and sold for $240k. Your total return on a $135k investment is $105k profit (if we back out the rent), which is about 78% return over 6 years. Thats not bad, but heres what jumps out -- you made most of your money from appreciation, not from cash flow or the initial purchase.
Breaking it down: $73.8k in rent over 6 years is only about $1,230/month average. Thats thin margin on a $240k sale price. The real win was the market moving. In a flatter market, youre looking at a much tighter margin. Your rehab was solid at $65k on a $70k acquisition, which suggests good contractor relationships and execution.
Heres the question -- did you actively manage this as a rental or let it ride? And would you do the same strategy again in today’s market, or are you shifting toward faster flips given how much of your profit depended on the appreciation?
I mis quoted the buy date. We actually bought in December 2021. By the time we finished the rehab in June 2022 it was actually the peak of the market here so there really hasn’t been hardly any appreciation.
Strong deal, and Janice nailed it. What you did is the exact wealth-building template: forced appreciation through rehab, consistent cash flow while holding, and a clean exit. $135k in profit over 5 years is solid -- that's your annual return showing up on a single property.
The one thing I'd push back on a little: those numbers hide how much capital was tied up. You put in $135k ($70k purchase + $65k rehab) and got $135k out. That's a 2:1 return over 5 years, which is decent but not spectacular on a percentage basis. The real win was the $73k in rent during holding -- that's what smoothed out your math and made the deal work. Without those payments, you'd have broken even or lost money waiting for the property to appreciate. That's why cash flow during the hold matters so much.
On your next deal, I'd ask: can you get rents up faster? If market rate is higher than $70k paid, could you have repositioned sooner and captured more annual cash flow? Sometimes the biggest missed opportunity on deals like this is holding too long with undermarket rents.
That's a solid exit. 65k rehab on a 70k purchase plus rental income while you held it adds up fast. The fact that you forced appreciation and generated cash flow over six years is exactly the playbook that works. Most people only look at the end number and miss that you had money working for you the whole time you owned it.
The real conversation worth having is this -- what did you learn that you'd do differently on deal number two? Because if you nail the process, you can repeat it. Did the construction timeline surprise you? Vacancy periods? Carrying costs? Most flippers struggle not on the big picture but on the small stuff that compounds.
What markets are you looking at for your next deal, and are you sticking with the buy-and-hold-then-sell model or are you going to flip faster next time?
I would say go do it over again and again and take note of what worked and where you can improve. Eventually, you will have a formula or a strategy that works for you.
Depends, what did you do with the money? Buy a boat? Bad deal. Expand your portfolio? Great deal.
When it comes to selling, it's not just "was it a good deal" but how you spend the money. That's what matters.
For example when I sold my condo, I used the proceeds and did a 1031 exchange into a 50/50 partnership on a 4 plex and bought another triplex. Sold one unit to gain 7. So was it a good deal? Absolutely, I expanded the portfolio bringing at least double the gross rents.
Depends, what did you do with the money? Buy a boat? Bad deal. Expand your portfolio? Great deal.
When it comes to selling, it's not just "was it a good deal" but how you spend the money. That's what matters.
For example when I sold my condo, I used the proceeds and did a 1031 exchange into a 50/50 partnership on a 4 plex and bought another triplex. Sold one unit to gain 7. So was it a good deal? Absolutely, I expanded the portfolio bringing at least double the gross rents.
When you get to be 65 years old and have 18 houses it's ok to sell one to buy a boat now and then:)
We bought this house in 2020 for $70,000, we put $65,000 into the rehab. We have gotten $73,800 in rent since then. We just sold it for $240,000. Was it a good deal?
Wow! That’s a solid win! You turned $135K into $240K and also collected rent along the way, so even before factoring in cash flow, the appreciation and exit look great. If you’re thinking about your next move, the Midwest has undervalued properties where you can replicate strong cash flow and upside, sometimes even with less rehab needed.
Absolutely a good deal. You forced 5k of value on a 0k purchase, held for income, and exited with 00k profit. That's the real estate playbook right there. Most people get stuck analyzing deals to death and never pull the trigger -- you executed three times over.
What stands out though: you got 3,800 in rent collected against a 5k rehab. That's 1.1x your rehab cost covered by income alone over 6 years, meaning your rental income basically paid down your rehab cost while the property appreciated. Then you exit for 40k on a 35k total investment. 05k profit on 6 years of effort is solid, and that's before you account for principal paydown if there was a mortgage in there.
The lesson for anyone reading: this is why you focus on the fundamentals. Find it cheap, add value smart, rent it out at market rate, and let time do the work. Were you able to refinance along the way after the rehab, or did you hold it cash the whole time?
That's a really solid play. You picked up the property at the right price point, your rehab was realistic (5k on a 40k end result is reasonable), and you held it through the rent phase to build equity. Too many people try to flip everything or rush to refinance before the property is stable. You let the rent work for you and got paid twice -- once through cash flow and again through appreciation plus the sale.
The math breaks down to about a 70% return on your 35k in hard costs (0k purchase plus 5k rehab), plus 6 years of rental income coverage. That's forced appreciation through rehab, passive income, and time. That's the formula that actually works.
The one thing I'd note: if you'd refinanced after stabilization instead of holding and selling, you could've extracted most of your capital and kept the property long-term. But holding 6 years and selling is a totally legitimate exit. Some deals are better as sales, especially if you found a better opportunity to deploy that 40k. The question isn't whether it was good -- it clearly was -- but whether selling was the right move compared to keeping it and refinancing.
When you decided to sell rather than hold long-term, what was the deciding factor? Was it finding a better deal to deploy capital into, or just wanting to lock in the gains?
That's a solid flip, Mike. Let me break down why: You bought at 0k, put in 5k, so all-in was 35k. You sold at 40k. After accounting for closing costs, realtor fees, and the 3.8k in rental income you collected, you're looking at a clean exit with about 00k+ in equity. Not bad for the holding period.
Here's what catches my eye though -- the 5+ year hold. You forced appreciation through the rehab, which is good. But you also had rental income covering a chunk of your carrying costs, which isn't typical for a flip. The real question for your next deal: can you scale this without the rental income cushion? Pure flips that need to move in 6-9 months on that margin become a lot tighter when you're holding costs eating into your profit every month. Were you planning to hold this as a rental originally, or was this always an exit play?
That's a solid flip, Mike. Let me break down why: You bought at 0k, put in 5k, so all-in was 35k. You sold at 40k. After accounting for closing costs, realtor fees, and the 3.8k in rental income you collected, you're looking at a clean exit with about 00k+ in equity. Not bad for the holding period.
Here's what catches my eye though -- the 5+ year hold. You forced appreciation through the rehab, which is good. But you also had rental income covering a chunk of your carrying costs, which isn't typical for a flip. The real question for your next deal: can you scale this without the rental income cushion? Pure flips that need to move in 6-9 months on that margin become a lot tighter when you're holding costs eating into your profit every month. Were you planning to hold this as a rental originally, or was this always an exit play?
Are you a bot? I'm seriously asking because your responses have gotten weirder and weirder...