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.

15Reply
254 views

Most Popular Reply

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....

See this reply in the discussion

92 Replies

Jump to latestLatest
  • Investor · McKinney, TX · Member since 2009 · 405 posts · 160 votes
    11y

    Way to go @Dawn Anastasi - Congratulations!

    I can only dream of deals like that.

  • bennett, CO · Member since 2014 · 225 posts · 122 votes
    11y

    That is so wonderful!

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

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

     I had to pay $85 in closing costs.  Note that I'll also have gas, electric, water/sewer while the unit is unoccupied.

  • 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....

  • Investor · boston, MA · Member since 2012 · 8 posts · 1 vote
    11y

    Congrats, Dawn! That was a great deal.

  • Investor · Sacramento, CA · Member since 2014 · 308 posts · 94 votes
    11y

    Congrats @Dawn Anastasi That is a fantastic deal.  Thank you for the pictures.

  • Philly Area, PA · Member since 2008 · 297 posts · 27 votes
    11y

    Awesome Dawn! 

  • Investor · Green Bay, WI · Member since 2011 · 19 posts · 3 votes
    11y

    Congrats for the awesome deal Dawn! Pretty inspiring for a lot of people out there. And thanks for sharing it with the rest of us.

  • Flipper/Rehabber · North, NJ · Member since 2014 · 91 posts · 23 votes
    11y

    Wow those are great numbers. Congrats @Dawn Anastasi 

  • Tampines, Singapore · Member since 2014 · 68 posts · 21 votes
    11y

    Congrats, that's an amazing deal. Just curious, if someone can afford those rent          (>2% rule), why can't they afford the purchase of the house? 

  • Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    11y

    Way to go Dawn!

  • Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
    11y
    Originally posted by @Martin Yung:

    Congrats, that's an amazing deal. Just curious, if someone can afford those rent          (>2% rule), why can't they afford the purchase of the house? 

    Bad priorities would be my guess.  I have a tenant that bought a fancy new pickup that cost more than the house he is renting.  Plus it is hard to get bank loans on lower priced properties.

  • Flipper/Rehabber · Elkhart, IN · Member since 2014 · 197 posts · 41 votes
    11y

    Fantastic acquisition. Congratulations, interesting how you didn't budge, and the seller finally gave up. 

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

    Congrats, that's an amazing deal. Just curious, if someone can afford those rent          (>2% rule), why can't they afford the purchase of the house? 

     That would require the discipline to save up money to afford the place, versus buying that big screen TV or going out to dinner or having your nails done, etc.

    Some people are spenders, some people are savers, and some people are investors.

  • Dawn AnastasiPro Member
    OP
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y
    Originally posted by @Paul Ewing:
    Plus it is hard to get bank loans on lower priced properties.

     I bought all-cash versus using financing.

  • Boston, MA · Member since 2014 · 62 posts · 26 votes
    11y
    Originally posted by @Dawn Anastasi:
    Originally posted by @Paul Ewing:
    Plus it is hard to get bank loans on lower priced properties.

     I bought all-cash versus using financing.

     So you'll make your initial money back in 5.5 years? Damn. That's awesome :)

  • Investor · Chicago, IL · Member since 2013 · 451 posts · 96 votes
    11y

    Congrats Dawn!

    @Dawn Anastasi 

    what was the cost of the work contracted out?

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

    Congrats Dawn!

    @Dawn Anastasi 

    what was the cost of the work contracted out?

     Here is what I had done by a contractor:

    - Replace flooring in one bedroom with wood-look vinyl

    - Patch wall in same bedroom

    - Add trim around bathroom door (not sure why but it was missing)

    - Fix light switches in hallway (would not operate sconces on the wall)

    Cost: $338.50

    - Supplies: the flooring I used for the bedroom (12x15)

    - 5 doorknobs

    - Smoke detectors and CO2 detectors

    - New mailbox

    Cost:  Approximately $250

    I installed the doorknobs, smoke detectors, mailbox, and CO2 detectors myself.  The doorknobs and mailbox were an afterthought, but I think they were a good investment.

  • Investor · Chicago, IL · Member since 2013 · 451 posts · 96 votes
    11y

    Impressive - kudos to you again.

  • Real Estate Investor · Kirkland, WA · Member since 2012 · 480 posts · 116 votes
    11y

    Wow! Ten times that price would be a good deal in my area. Amazing!

  • Investor · San Francisco, CA · Member since 2014 · 577 posts · 203 votes
    11y

    @Dawn Anastasi 

    Decent cash flow. Congrats!

    What are your thoughts of the market and estimate of any appreciation you might see?  Population and job growth forecasts?  What is the path of growth in Milwaukee? Where are the high end service jobs located?  Where are new Home Depots/Lowes coming in?

  • Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
    11y

    @Dawn Anastasi   Q: What do you think it would appraise out for? 

    Also, I gotta ask. Why in the world would you not come off your number $500? You're making $300 a month off this thing. You would have gotten that back in 2 months of rent. And you risked $300 a month in cash flow to save $500?

    Typically when I see that, I tend to think that you might have had some other deals/rehabs going on and didn't really have to have this one. But at that $16k price and only at that price, would you be interested.

    I guess the answer to my question above might also answer it. If the thing is only worth say, 20k, then refusing to pay more than 16k would also make sense.

    But based on your typical deals, I somehow doubt thats going to be the case. I'm guessing maybe just a bit too busy to want to do it so you wouldn't budge?

    If not, I don't see why you wouldn't have paid the $500...... Losing a great deal for $500 would be a pretty tough "one that got away" story if it happened to me.

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

    @Dawn Anastasi 

    Decent cash flow. Congrats!

    What are your thoughts of the market and estimate of any appreciation you might see?  Population and job growth forecasts?  What is the path of growth in Milwaukee? Where are the high end service jobs located?  Where are new Home Depots/Lowes coming in?

    This is a condo townhouse and in general in this area, condos really don't appreciate very high.  However, I bought for cash flow not appreciation.

    There are more Menards in the area than Home Depot or Lowes.  I only know of one Lowes; the other one that was near Menards wound up closing down.  I prefer Menards to Home Depot or Lowes anyway.

    Income levels in Milwaukee are slowly recovering from the recession.  The two biggest job growth areas are manufacturing and health care.  Unemployment is expected to go down 0.5% from 2014 to 2015.  It's not a fast-moving train.

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

    @Dawn Anastasi   Q: What do you think it would appraise out for? 

    Also, I gotta ask. Why in the world would you not come off your number $500? You're making $300 a month off this thing. You would have gotten that back in 2 months of rent. And you risked $300 a month in cash flow to save $500?

    Typically when I see that, I tend to think that you might have had some other deals/rehabs going on and didn't really have to have this one. But at that $16k price and only at that price, would you be interested.

    I guess the answer to my question above might also answer it. If the thing is only worth say, 20k, then refusing to pay more than 16k would also make sense.

    But based on your typical deals, I somehow doubt thats going to be the case. I'm guessing maybe just a bit too busy to want to do it so you wouldn't budge?

    If not, I don't see why you wouldn't have paid the $500...... Losing a great deal for $500 would be a pretty tough "one that got away" story if it happened to me.

    If I didn't get this one, I would just wait to buy something else in the future.  There's always another property to buy.

    I didn't have any other deals of my own going on at the time, no.  If I had unlimited capital, then I would be buying more of my own deals.   But no one has unlimited capital.

    Regarding appraisal, if the market was better it would appraise for twice what I paid for it, but the market is still in recovery mode. But that's okay, I'll just buy when the market is low (or near the low point).

  • Residential Real Estate Agent · Livermore, CA · Member since 2010 · 140 posts · 28 votes
    11y

    Very motivating post.  Thanks so much for sharing Dawn.  

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