Posted over 7 years ago

Property #3 (House #2!)

So at this point we were pretty tapped on cash, but had good equity in our house, so we decided to approach the bank for a home equity line of credit (HELOC).  The bank was happy to do it, and gave us a HELOC for $50k at 5% interest.  

In May/June 2014 we found a house on Auction online at in the Bannister Mall area also.  It was a 3/2 ranch with 2 car garage that from the pictures looked to have great bones.  There was a showing that day and we went and looked at it and figured if we could get it for $20k or so (it needed $20k we thought), it would be a good deal.  On the auction we ended up bidding against just one other person and we won the auction but didn't hit the reserve at $20k.  Home search called us after the auction and we settled for a sales price of $23k.  

Here is a little about what the house needed:

-hardwoods refinished throughout

-kitchen gutted and redone

-both bathrooms gutted and redone

-new sliding back door in back

-back yard graded as there used to be a pool

-paint throughout

-upgraded electrical

-new furnace (we hadn't planned on this)

-new A/C unit (we hadn't planned on this either)

When it was all said and done, the rehab cost us $27k ($7k over budget and it took 3 months), but we had a brand new house and were all in for $50k.  The house rents for $875 and rented in a few weeks.  The renters have been in there the whole time and plan to re-up their lease.  So having had all 3 properties for over a year now, we definitely like SFH's better then the duplex we have and have had great luck with them.  

Lesson learned-always plan for more expenses on a rehab than you expect, and plan much more time than you think it will take.  I thought this would take a month or so, but it ended up taking 3, so plan on these things!

Here is to another 17 properties!