$23,000 house

$23,000 house

Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes

On the Bigger Pockets Podcast Show 29, I spoke about very low-priced houses that I'm buying in Milwaukee. In the show, Josh made the comment, "my neighbor just built a garage for $25,000" Other people have commented that $25,000 will buy you a nice car or SUV.

Can you really get a house for about that amount?

I just purchased a 2-bedroom single-family home on September 6. The house was originally available back in April/May 2013 as a short sale, then went to foreclosure. It was listed at $25,000 and I made an offer for $23,000 and the offer was accepted.

Okay, well what kind of condition house can you buy for $23,000?

Surprisingly, this house was in livable condition right off the bat. It had some cosmetic issues that I needed to address. Here are some pictures from before renovation:

I had a professional inspection done on the house and the inspector gave me the thumbs up. The house came with some nice features:

- Furnace was a newer high-efficiency (about 7 years old)

- Stove and refrigerator included

- Master bedroom had skylight and vaulted ceiling

- A significant portion of the plumbing in the house had already been replaced/upgraded

- Vinyl windows throughout

- 2.5 car garage with opener

Work that I did to rehab it:

- Painted the living room, hallway, second bedroom, and kitchen

- Replaced the kitchen floor with ceramic tile

- Replaced the basement windows with glass block

- Re-sided the garage

- Put a new door on the garage

And some other cosmetic fixes.

The tenants just moved in this past weekend and they love the house so far. The best feature is that it's very energy efficient. They were living in an 80 year old house where they had to crank the heat up to 90 and still had to run space heaters. The heat was only at 60 degrees and it was more than warm enough. They had asked their landlord to upgrade the windows and the landlord would not do it.

What does a $23,000 house rent for?

I'm getting $825 per month with the tenants paying gas/electric and taking care of the lawn care.

Overall, it's a great deal, but it did come up at a bad time as I was trying to rent out both units in a duplex and I still have another single-family home waiting in the wings for me to rehab. So I've been crazy busy getting this one up and running with everything else I've been doing. (And working a full-time job where I'm crazy busy there too!) But I would definitely do it again.

7Reply
21 views

Most Popular Reply

Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
12y

Nice deal. Those are the kind of numbers I like too!

I always cringe when someone mentions they're buying a house for $90,000 and renting it for $1,000. I like your numbers better....

See this reply in the discussion

79 Replies

Jump to latestLatest
  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    @Dawn Anastasi

    I have no staff. Most of these are not going to be big projects. I just did a big project where I did act as GC/project manager. There were over a dozen sub-contractors, and a couple of other individuals. That project was a flip/rehab/resell. Many of the contractors have been with me a long time. I have a roofer who did 18 roofs for me. I have a tree trimmer I've used for decades. I have a painter that probably has painted 50 properties for me. Some of the contractors tell me I'm their biggest customer or close to their biggest. I get pretty good service and quick responses.

    The 4 that are going to be flipped as-is obviously need no work to be done. The 9 rentals are mostly cosmetic and will be hired out to companies, some of the same as on the big rehab project. On the rentals I'm planning on using a manager for about half of them, which is a departure for me as I almost always self manage even out of state.

  • Wholesaler · Lenoir, NC · Member since 2013 · 297 posts · 127 votes
    12y

    I purchased a 5 bed room house that was about 1800 sq. ft. in June 0f 2012 for $10,000. I was live able but I still did about $7,000 dollars in work on it as you can see some of the colors that it was painted when I purchased it. I rent it out for $525 a month which h I could probably get a little more if I would have done a bit more work. The last time that it sold it was for around $90,000. Where I live there are deals in abundance.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by David Lee:
    Where I live there are deals in abundance.

    I'm sure this is true in several areas of the country.

  • Professional · Pittsburgh, PA · Member since 2013 · 88 posts · 42 votes
    12y

    Dawn, this is a great story. I live in the Youngstown area and it is certainly not "a Detroit" but it's still rough in many areas and trying to find a comeback. Our suburbs are pretty stable though, great schools- the kind of place where many people stay near their hometown. You can find a deal like yours in Milwaukee pretty easily too. It would also rent for at least 700 for a 2bd with basement. So far I have only managed properties here. I am learning about investing and looking to start soon. I am on the fence about the area and if I do want to invest here given the downward population trends since the end of the Steel Mill era. However, we are exactly in between Cleveland and Pittsburgh, and also directly in between NYC and Chicago, sitting right on Interstate 80. I guess maybe that's what put us on the map. I am going to keep watching here, if we turn the corner and stabilize the population or even grow, I am jumping in! :)

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    @Jen Kurtz

    Welcome.

    I'm pretty sure that Youngstown was there before any interstates, which were started in the 1950s by President Eisenhower. Both the Steel Mills and Youngstown University probably pre-date the interstate.

    What you say is very true, lots of real estate opportunities in Ohio and Pennsylvania, the rust belt, fly over country, that often gets overlooked, but there are opportunities there. Ask any of the many Ohio investors here on BP including @Ben Leybovich

  • Professional · Pittsburgh, PA · Member since 2013 · 88 posts · 42 votes
    12y

    @David Krulac

    Haha yes, I know that Youngstown pre-dates the Interstate, I was being facetious ;) John Young bout the land before 1800 and plopped a sawmill on the Mahoning River, then came the coal days and the railroad. But yes, there are many hidden gems in this region! Plenty of areas trying to make an economic comeback using nativism and some economic incentives, many people that have grown up in "the rust belt" take pride in where they come from so many try to create change. Of course fundamental economics may or may not fall in their favor, but the effort and optimism is un wavering. Would you agree Ben?

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    12y

    @Dawn Anastasi

    There are a few people that radiate goodness - you are one. You deserve to win, and you will win!

    @David Krulac

    I am not one to do 40 deal per year - you know this. But, when I want a deal all I have to do is look. So, I guess I haven't noticed any shortage. Ohio is great in terms of CAPs.

    @Jen Kurtz

    I do agree! People tell me all the time - I can't find deals like this here. I tell them - don't look for deals like this there, look for other kind of deals. Investors need to understand that we don't live in vacuum - we must wok with that which the marketplace gives us. And that is where the grit, effort, and drive that you are speaking of comes into play...

    Dawn - always a pleasure!

  • Professional · Pittsburgh, PA · Member since 2013 · 88 posts · 42 votes
    12y

    @Ben Leybovich

    Cheers!

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    12y

    @Jen Kurtz

    Feel free to look me up - we'll chat :)

  • Professional · Pittsburgh, PA · Member since 2013 · 88 posts · 42 votes
    12y

    @Ben Leybovich

    - you got it, thank you!

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Ben Leybovich:
    @Dawn AnastasiThere are a few people that radiate goodness - you are one. You deserve to win, and you will win!

    Wow Ben, didn't expect all the rainbow talk! (But it's much appreciated!)

  • Investor · Houston, TX · Member since 2013 · 14 posts · 1 vote
    12y

    Congrats Dawn! Great deal. If you don't mind, I'm curious how you came to the $23K offer. If you were worried about competition, why not offer full listing price? If not worried about competition, why not offer less? Thanks and congrats again.

  • Wholesaler · Milwaukee, WI · Member since 2013 · 60 posts · 9 votes
    12y

    Congratulations @Dawn Anastasi That's so amazing! So I'm just wondering you said that you had your inspector look at it and they gave you a thumbs up. What are some things that if found would make you not want to take on this house? I guess my question is what are things that flippers and buy-and-holders (like yourself) just won't take on?

  • Real Estate Agent · Milwaukee, WI · Member since 2010 · 129 posts · 24 votes
    12y

    Hi @Dawn Anastasi great post...maybe I should follow up and piggy back off yours and show BP members what a $32,000 duplex looks like ;)

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Alex Anderson:
    maybe I should follow up and piggy back off yours and show BP members what a $32,000 duplex looks like ;)

    Go for it!

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Vanessa Ugochukwu:
    What are some things that if found would make you not want to take on this house?

    If the foundation was crumbling

    If it was overrun by bugs ... I hate bugs!

    If I had to replace the furnace, water heater, and roof besides the siding ... that would have been a lot of extra expense and I would have passed.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Adam Jones:
    Congrats Dawn! Great deal. If you don't mind, I'm curious how you came to the $23K offer. If you were worried about competition, why not offer full listing price? If not worried about competition, why not offer less? Thanks and congrats again.

    I typically never offer full price. That being said, you have to find the spot where the numbers make sense. What price point will be accepted? I was a little concerned about competition because how could anyone not want this house? But on the flip side, it didn't sell as a short sale and now it went to foreclosure. So why didn't people want it? I had the inspection done to get a professional set of eyes on it to be sure.

    So I'm not sure why someone else didn't buy it. Maybe because the garage siding was peeling off and ugly? Maybe because it wasn't that large of a house? Maybe because one of the basement windows was cracked? In the end I can only speculate but I'm just glad I got it.

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    12y

    "If it was overrun by bugs ... I hate bugs!"

    Bug evictions are easier/cheaper than tenant evictions. And can be outsourced. I think we've found your weakness.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Jon Klaus:
    "If it was overrun by bugs ... I hate bugs!"

    Bug evictions are easier/cheaper than tenant evictions. And can be outsourced. I think we've found your weakness.

    Oh noes --- I've been outed at a bug hater! :)

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y
    Originally posted by Brant Richardson:
    Sounds like you have too many deals. When you are ready to start wholesaling I think there might be a few buyers for you on BP. That is a cash cow.

    I don't think most people on the site want to invest out of state; most want deals in their own area which is absolutely fine. Investing out of state is not for everyone.

  • Investor · Santa Barbara, CA · Member since 2013 · 658 posts · 315 votes
    12y

    Not for everyone... but it is for me. A good friend and I will be investing in the same market, not really a partnership but sharing ideas, contacts and deals under consideration. I figure that we can get to know a out of state market well enough to do decent deals and build a portfolio. Decent deals in another market are better than incredible deals here as far as a buy and hold strategy goes. It will be a long time before we have a team we trust enough to pounce on a great deal like yours that needs rehab, but maybe some day.

  • Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes
    12y

    @Dawn Anastasi your posts and @Will Barnard post are part of the reason I decided to join the community, so I could give you both huge thumbs up!

    I like your posts and purchases, because they are fantastic, and you are crushing it! And I like Will's posts, because you can tell he's extremely knowledgeable, and his deals are ridiculous!

    Keep up the great work!

  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    12y

    Chante, you must like extremes. Dawn's $23,000 deals, and Will's $3,200,000 deals. It is great that they are both viable models with many, many others in between.

  • Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes
    12y

    @Jon Klaus Absolutely! I like Dawn's because they are "reasonable" and more attainable for the initial investor. Will's deals are something you aspire too, and yes, there is a huge chasm in between. That's the great thing about real estate, it's like Baskin & Robbins, there is something for everyone!

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    12y

    @Chanté Owens I completely agree, @Will Barnard is totally killing with his deals!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.