Another Rental Property! (This time a townhouse)

Another Rental Property! (This time a townhouse)

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

Okay, so I just posted back a couple of months ago regarding a 3 bedroom single family I bought on July 15th.  But, I had the opportunity to buy a 3 bedroom townhouse.

This deal actually started back in May! I visited the property as the owner had purchased from an older woman and basically wanted to flip it. So he listed it on Craigslist for $20,000. I went through, and saw that the property needed some work and the HVAC was older as were the appliances, so I offered him $16,000. He said no and that he would list it on the MLS.

So June goes by, he hasn't sold it yet. 

July goes by and he hasn't sold it yet.

August comes about and I follow up with him and let him know that I'm still willing to buy it for $16,000.  He says no, but offers it to me for $18,000.  I say no can do.

September rolls around and I again email him and offer $16,000.  He said he would do it for $16,500.  I stand firm and say no, $16,000 is my price.  (I wasn't budging even for $500!)

Now October rolls around and he says he will agree to my price of $16,000.  So we get everything arranged with the title company. There was a slight delay on closing because the condo association didn't get the paperwork to the title company in time, but it wasn't that much of a delay.

After closing I got the contractor in to get the work done that needed to be done (flooring, trim around the door, and some drywall fixes).

Now I'm having some showings (I have one tonight actually).  My goal is to get it rented on or before December 1st.

Here are some photos:

Kitchen - stove and fridge were included

Basement - washer/dryer were included

Half bath on main floor

The unit is 1,054 square feet and all 3 bedrooms are large enough to fit king sized beds.  The windows are all newer double-pane vinyl.  The carpeting is older, but other than being cleaned it should last several more years.  The windows all came with blinds or curtains.

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Chris K.Pro Member
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
11y

Good for you for having the discipline to stick to your numbers! I'm always jealous of the deals you come by. That is a great house for $16k.

This is what $16k might get you in my area if you don't lose it to a multiple offer situation....

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  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    11y

    You are a hard bargainer, Dawn. How much will it rent for? Any HOA fees?

  • Jon HuberPro Member
    Rental Property Investor · Boca Raton, FL · Member since 2014 · 1k+ posts · 713 votes
    11y

    @Dawn Anastasi   Looks like a great deal!

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Jon Klaus:

    You are a hard bargainer, Dawn. How much will it rent for? Any HOA fees?

    Rent will be $725/month + utilities.

    HOA fees are $205.30/month for 10 months, then $188.50 for 2 months, and then the next year cycles.

    Property taxes are $306.61/year and insurance is $228/year.

    After expenses and putting money away for reserves (repairs, maintenance, and vacancy) I expect to cash flow about $300/month.

  • Investor · East Lansing, MI · Member since 2014 · 82 posts · 43 votes
    11y

    @Dawn Anastasi  That's a nice deal. Congratulations!

  • Albany, OR · Member since 2014 · 16 posts · 3 votes
    11y
    That's awesome. See what happens when you stick with your price that you set. It took a while but you got it. Looks great too.
  • Blue Springs, MO · Member since 2014 · 353 posts · 52 votes
    11y
    That's great! I take it u are managing it yourself?
  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    11y

    Dawn is a cash flow machine.  You can hear more about her investing here:

    Dawn's BiggerPockets Podcast

  • Doylestown, PA · Member since 2014 · 25 posts · 12 votes
    11y

    You're going to cash flow $300/month on this buy and hold deal and you wouldn't budge the last $500.?   Way to stick to the plan.  I'm too soft.  Congratulations on a great deal. 

  • Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    11y

    That is amazing! Congratulations! 

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Reggie Maggard:

    That's great! I take it u are managing it yourself?

     Yes, I manage all my rentals myself.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Gregory Zanolini:

    You're going to cash flow $300/month on this buy and hold deal and you wouldn't budge the last $500.?   Way to stick to the plan.  I'm too soft.  Congratulations on a great deal. 

     Yeah, it's definitely tempting to just give in for $500. Believe me, I was tempted!  But $500 is my repairs cost, so I'm glad I didn't give in.

  • Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    11y

    I am coming to Milwaukee!

  • Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    11y

    Other investors could not see the opportunity you were able to obtain with this investment.   Congrats 

  • Rental Property Investor · Milwaukee, WI · Member since 2013 · 281 posts · 133 votes
    11y

    Congratulations you put in the work you deserve the pay. 

  • Newport Coast, CA · Member since 2014 · 95 posts · 73 votes
    11y

    Wow, a 3 bedroom townhome for less than 20K. Talk about affordability.

  • Professional · Jersey City, NJ · Member since 2014 · 154 posts · 87 votes
    11y

    @Dawn Anastasi 

    Congratulations.

    The pictures look nice.

    Seems to be a high quality purchase.

    Thank you for sharing your success.

    Are you working on other, similar leads?

  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    11y

    Congrats Dawn!  Way to have persistence and patience!

  • Investor · Austin, TX · Member since 2014 · 217 posts · 170 votes
    11y
    Wow! Good job Dawn. What an amazing price to pick up $300 in cash flow. In other news, I am moving to Milwaukee! Just kidding
  • Milwaukee, WI · Member since 2013 · 384 posts · 109 votes
    11y

    Nice work Dawn.  NW side of Milwaukee has a lot of condos and townhomes, I've always been curious how they would work as rentals and if there is ever any conflict with the condo associations.  Let us know how it goes.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Dan C.:

    Nice work Dawn.  NW side of Milwaukee has a lot of condos and townhomes, I've always been curious how they would work as rentals and if there is ever any conflict with the condo associations.  Let us know how it goes.

     This is actually my second townhouse condo in this association.  I picked up the first one back in April with a woman from Canada.  Other than the high association fees, the condo has been a good source of cash flow.  The condo association does allow rentals, however they are pretty strict on criteria on who they accept (they have their own screening).  Plus, renters are not allowed to have pets.

  • Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
    11y

    Welcome to BP.

    Great job @Dawn Anastasi. 

    You are an inspiration to a lot of people. $16,000 purchase price and $725 rental income that is more than 4% of the rental income. It's a fabulous deal.

    Thanks for sharing with all of us.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @James Syed:
    $16,000 purchase price and $725 rental income that is more than 4% of the rental income. It's a fabulous deal.

    Thanks for sharing with all of us.

    Actually I would count this as a 3.15% deal. First I take the rent and subtract the HOA fee. Then I divide by the purchase price + the rehab.

  • Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
    11y

    I see. Just curious, how much was your acquisition cost?

  • Residential Landlord · Greenfield, WI · Member since 2013 · 299 posts · 126 votes
    11y

    I paid 55k per unit, you paid 16k, and we get the same rents.

    I tip my hat to you.

    I'm doing this wrong,

    Maybe fellow landlords are right, I need to raise my rents.

  • Professional · Philadelphia, PA · Member since 2009 · 2 posts · 0 votes
    11y

    Congrats.    Nice pics.. 

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