#15 rental was purchased today

#15 rental was purchased today

Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes

We have worked on this since the beginning of april. but it's worth the wait. i first talked about the condition of the house here. the court documents took a long time, then the purchase price was discussed again. 

at the beginning, i had offered $50k. My estimated repair would be around 60k, the ARV would be around 130k. Help with @Michael Quarles i realized that i would not be a "home run". I went back to the estate executor and negotiated 20k off the originally agreed upon price. 

the house is located in Livonia. 

We are restructuring the loans of 7-9 of our current homes to get a credit line that's around 200k to give us more purchasing power for future purchases and repairs.. Since the line is not up and running yet, I had to borrow some money from a family member that doesn't even want a dime in interest. 

I have found a GC that will be doing the work. I am tired of running to home depot at night (and before my full time day job) and dropping supplies before the contractors come in. I will do this one the right way - sign a contract, visit the site at night and let someone else worry about the HVAC guy being a day late. I will just write the check.

this makes it 6 houses this year. I will be talking to Michael about my yellow letter campaign very soon. 

Will post picture when i find my high speed CF card!

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Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
11y

nice work @George P.   Your killing me!

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  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    11y

    That place was a bit rugged!  

  • Real Estate Investor · Hagerstown, MD · Member since 2013 · 276 posts · 107 votes
    11y
    Nice work!
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @David Bateman:

    The link works great. Congrats on the purchase. How did you find that rental? Was it a yellow letter campaign to vacant houses?

     neither..  in the initial thread in April, I mentioned that I drove by the intersection and my eyes saw dollar signs when I noticed that 10 hazmat suits were going in and out of that house. I drove up and gave the guy my card.  10 days later,  the phone rang. I live in the neighborhood and I think that won them over..  they are great people too. 

    I have a little issue with the quote that came in...  it's not turn key and it came 14k more (22% more)  than we told him the budget is.  so I may have to manage it myself with the guys I normally use.. which will slow down the process sin e I have a full time job. 

  • Investor · Newark, DE · Member since 2014 · 245 posts · 198 votes
    11y

    Congratulations! 6 in a year, WOW! How did you get financing for them all? After I reached number 9, banks all but stopped lending to me - the way they calculate DTI here, I am a very high risk apparently even though I have positive cash flow from each and every property I own, and I have a full time job...

  • Laguna Hills, CA · Member since 2014 · 146 posts · 31 votes
    11y
    Great job George P. !
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @Rumen Mladenov:

    Congratulations! 6 in a year, WOW! How did you get financing for them all? After I reached number 9, banks all but stopped lending to me - the way they calculate DTI here, I am a very high risk apparently even though I have positive cash flow from each and every property I own, and I have a full time job...

    borrow from family,  good paying jobs,  borrow from 401k, some were in wife's name so we found a bank that didn't count them all against us. 

  • Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Congrats George!

    That bathroom reminds me of the "don't do drugs" commercials from the 80's where the skinny heroin addict was laying on the filthy bathroom floor. Maybe it was filmed there.....

    Looks like a good purchase. You are the man.

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    thanks Rob!  they both died but the wife was a 650 and was medical assistant at one point .  and check this out....  the guy was an FDA meat inspector.  

    the neighbors have seen him live out of his car for quite a while in the target parking lot. the furnace has not worked for years and they were heating up the house with space heaters. 

    u can't make this stuff up. 

  • Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    11y

    Wow, congratulations!  Please keep us posted as you progress!  Looks like a lot of work, but that's how you get the really good deals right?

  • Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    11y
    Originally posted by @George P.:

    they both died but the wife was a 650 and was medical assistant at one point . 

     650? Pounds? 

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    yes..  sorry,  the auto correct took out the lb

  • Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Was her name Suzie Biggems?

  • Lender · Granite Bay, CA · Member since 2014 · 456 posts · 454 votes
    11y

    @George P. 

     First, congrats on what you are doing and the success you are having.  I am interested in the cash-flow numbers you are getting.  It sounds like you ended up paying $90,000 for the property and repairs and had to leave it unrented for 6 months to get it ready.  What will it realistically rent for in your market?  What kind of loan and interest rate (if any) will you have remaining once it is rented?  What is your long-term goal?  I mean, do you plan on keeping homes like this for a specific period of time, or until they reach a specific value?  I am always interested in the numbers behind the deals :-)  

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
    Originally posted by @David Oldenburg:

    @George P. 

     First, congrats on what you are doing and the success you are having.  I am interested in the cash-flow numbers you are getting.  It sounds like you ended up paying $90,000 for the property and repairs and had to leave it unrented for 6 months to get it ready.  What will it realistically rent for in your market?  What kind of loan and interest rate (if any) will you have remaining once it is rented?  What is your long-term goal?  I mean, do you plan on keeping homes like this for a specific period of time, or until they reach a specific value?  I am always interested in the numbers behind the deals :-)  

     hope I can answer all your questions. 

    I hope I am close to 80 and not 90. it will take me until March to be done unless I get other guys to do the interior.  all my guys have other trades jobs and that's why I pay less but takes longer.  

    when all done,  my insurance will be around 600 per year and taxes about 2800. I have a house on that street that went for 1300 but in the summer.. that's why I am not in a hurry to get it done next week. 

    I know I have then option to whole sale it,  but making 10 or 20 this year is not what I am after.  I love the rent roll each month.  I love knowing that I have updated a good house to look great.  most of the people that come in to look at a house tell us that's the best house they have seen.  maybe I am a dreamer,  who knows. 

    end goal?  I want to be at my daytime job and have a guy that will take care of everything.  I thought that having 4 is a crazy goal.  

    a few houses ago I needed a loan and I called between 53 and 57 banks..  I didn't quit until one said yes. but nothing beats getting a house cash! 

  • Lender · Granite Bay, CA · Member since 2014 · 456 posts · 454 votes
    11y

    @George P. 

     It sounds like you are going to end up really well on this project and investment!  Thanks for sharing the numbers :-)

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y

    exterior work still needs to be done. been too cold for cement and landscaping. but the house exterior is complete

  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    11y
  • Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    These pics look great @George P.

  • Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    Nice work @George P.

    Those original floors were hit! Did you tear out the hardwood and replace, or put laminate over? Hard to tell from the pic.

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