Customer gave me a home that I'm currently renting

3 Replies

Investment Info:

Single-family residence buy & hold investment in Clarkston.

Purchase price: $105,000

House was gifted to me by one of my customers, house was basically uninhabitable after he passed due to him smoking 2 cartons of cigarettes a week for 20 years. Painted inside of house, remodeled bathroom, remodeled kitchen, replaced the roof, and fixed a termite damage repair that cost $5,700, and just replaced the water heater with an electric on demand water heater.
House is rented and bring in $850 per month. My tenant works in the movie industry and has been working out of the state

What made you interested in investing in this type of deal?

Always wanted to own rental property

How did you find this deal and how did you negotiate it?

Customer gave me the home because I saved him from losing home. I installed a furnace 6 years ago for an elderly disabled blind man. His house was paid for, but a neighbor convinced him that he didnt need HO insurance. One year after I installed the furnace, he called me to inspect his water heater. Had a massive flood in the basement, a collapsed wall, 2 ft of mud. Etc. I cleaned the whole thing out, took me a month, and didnt charge him a penny. He called me a couple months later and told

How did you finance this deal?

Paid for all repairs out of my pocket

How did you add value to the deal?

Worked 45 days with out pay

What was the outcome?

He gave me his home

Lessons learned? Challenges?

I would not spend all my cash on one home

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Kind of. After Sonny passed, I had three real estate agents look at house, and they all said it was not sell able in the condition the home was in. They all said I should fix it up and rent it out.
Had three random buyers show up and offered me $50,000 - $65,000 cash for the house. I declined the offers for cash. The dirt was worth more than $65,000.

Sounds like a pretty good deal.  But it has been super stressful.  

Hired a guy I know who has had a subpar remodeling / deck business for 30 years, tried to pull some insurance scam on me.  His worker, "fell off the roof" and hurt his ankle. And the first thing the contractor told me was "You need to call the insurance agent."  I was like, NO, Im calling 911 or driving him to the hospital.   I was then informed he DID NOT have insurance.... and 5 minutes later  I caught his illegal alien Irish worker shooting herion in the 30 yard dumpster in the driveway. I fired them on the spot, and the drug addict harrassed me for 6 months.  Luckily, I have pictures and video of him shooting up, which I sent to the three lawyers that contacted me regarding drug addict

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When I finally got the house livable, my coworker decided he didn't want to sign the lease, and I almost had to evict someone who was living in the house, that had never paid rent or a downpayment.....  :)

Then fun really started!!!

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