All Forum Posts by: Susan Grinde

We have rehabbed a couple of cottages in the old mining town of Butte, MT. Lots of fun finds of early 1900's coins and newspapers. Found some fascinating construction behind layers of fiberboard and beadboard. Those folks were resourceful! Our first rehab uncovered plank walls (no studs) built from wood planks taken off rail cars or concrete forms from large buildings. Found carvings of past tenants and even signatures of the men that built one of the homes. Made us decide to leave behind a sort of time capsule in some of our rehabs for future rehabbers to find. One thing we did not find, which I am thankful for, is dynamite. We found lots of detonation cord and a couple miner's picks, though. 

I am revamping my lease agreement and I am wondering what to do about some of the appliances. I have appliances like the refrigerator and washer/dryer available with the rental because they were leftover appliances from previous tenants. Nice appliances with lots of life, but usually my tenants must bring in their own refrigerator and washer/dryer. I feel like I may be responsible to replace these appliances if they were to break down or should the tenant buy their own appliances. What do other folks do about appliances in their rentals and what are your experiences?

@Ryan Short Maybe look at Butte, as well. You will find good cash flow in single family or multi family dwellings. If you are trying the BRRRR strategy, make sure you know your reno costs as you will probably be dealing with some very old dwellings that can blow your budget. Good rental potential with nice student housing and short term nursing housing. Best of luck!!

Butte is an acquired taste. It started as a boom town because of the copper mining. You can find a wide variety homes, 100 year old miner's cottages to grand mansions in uptown and new builds in the flats. We like buy and hold in the uptown because we found there is a demand for nice, updated student housing with historic character. We have never had problems with students trashing the homes and they are rarely vacant. We have three in uptown. We just purchased our first SFR in the flats. I think it will be a good family buy and hold. I keep wanting to get into multi-family dwellings, but have just kept to SFR because it is what I know best. Many multi-family opportunities, if you like that sort of thing.

I think that Butte is turning around. Northwest Energy recently located their headquarters in uptown, a teaching health facility (Praxis Center?) is coming to uptown, and a call center just announced locating a facility in the flats. Good indicators for new jobs and people to fill our rentals, I hope.

I think it is a good market for flippers. Houses are still pretty reasonable, but I have noticed prices climbing since we bought our first in 2014. Possibly by about 30% increase. We would love to see more flippers come in to get some of these old homes updated and safe. It would be even better if anyone that flips some of the old homes would keep some of the historic character instead of ripping it out and replacing it with new. After all, Butte is the largest historic district in the nation. Often it is not cost effective to rehab a home to it's original character, but it would be pretty cool if it could be done to preserve some of Butte's history. 

Many of the lower priced homes need lots of work. Be prepared to reroof, rewire, replumb and deal with possible foundation issues (some of these homes don't have concrete foundations!). We usually spend about 30K to completely rehab a 1,000 sq ft house that we have purchased for about 35K.

I am on a wholesaler's list and on occasion I hear from him. If I find his contact info, I will get it to you. I have always worked with Katey White at Bershire Hathaway. She is a buy and hold investor as well as a realtor. A real sweetie.

Anyways, let me know if you have any other questions or if I can help you in any way. I actually live in Washington State, but am in Butte a lot during the spring and summer. We will need to meet for coffee next time we get to Montana!

Have a blessed day!

Daniel. a conservative ARV is $85K. Carrying costs were $160/mo and it took us 3 months to renovate it before my son got a roommate to house-hack with. House-hacking is great if you have a college student. He managed the property and the rent covered all his monthly expenses with $150/month cash flow.

Since he has graduated, the home continues to be used as a rental for students and young families. Gross annual income is about $11,100, annual operating expenses is about $4,900 with a net operating income of $6,200 annually. ROI is 9.37%.

We are happy with our first long distance investment. We purchased it for our son to live in while going to school and now it continues to provide passive income as my husband nears retirement. We use the back house for our personal use, but are considering using it for a vacation rental. We would be able to add another $500 to our monthly cash flow. 

We are purchasing other properties in the area. We like the student rentals, but will include other single family homes for family rentals. I don't think we would have done much differently except for hire out more of the work that needed to be done. It was grueling. We also lived in the house while we worked on it. Not for the faint of heart. It was a good learning experience, though.

Thanks, Seth. We tried to give it some Folk Victorian character by painting the fish scale details some fun colors. It is the first in the neighborhood to be rehabbed and there are others following suit. Good to see.

P.S. You and my son share first names!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $35,000
Cash invested: $60,000

Purchased a property with our son in Butte, MT that had two dwellings on it. Completely rehabbed the front dwelling (2bd, 1ba Folk Victorian miner's cottage) top to bottom and added 1/2 bath. Our son house-hacked for three years while attending Montana Tech. Completed rehab on the back dwelling (1bd, 1ba Craftsman cottage that had not been lived in for 40 years). The Folk Victorian stays rented to students and young families while the Craftsman cottage is for our use when we visit Butte.

What made you interested in investing in this type of deal?

An investment property for our son to live in while he attended Montana Tech and house-hacked with one other student.

How did you find this deal and how did you negotiate it?

Local realtor

How did you finance this deal?

Cash

How did you add value to the deal?

Completely renovated both dwellings while adding a half bath to front house.

Lessons learned? Challenges?

Rehabbing 100 year old homes takes a lot of time and effort. We did the work ourselves. Again, if you do not have the knowledge or energy to do your own rehabs, hire it out. It will be rent ready much faster.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Katey White with Berkshire-Hathaway continues to be our realtor.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $35,000
Cash invested: $60,000

Purchased a property with our son in Butte, MT that had two dwellings on it. Completely rehabbed the front dwelling (2bd, 1ba Folk Victorian miner's cottage) top to bottom and added 1/2 bath. Our son house-hacked for three years while attending Montana Tech. Completed rehab on the back dwelling (1bd, 1ba Craftsman cottage that had not been lived in for 40 years). The Folk Victorian stays rented to students and young families. We are considering using the Craftsman cottage as a vacation rental since our son has graduated, but we still need a place to stay when we are in town to work on other investment properties.

What made you interested in investing in this type of deal?

An investment property for our son to live in while he attended Montana Tech and house-hacked with one other student.

How did you find this deal and how did you negotiate it?

Local realtor

How did you finance this deal?

Cash

How did you add value to the deal?

Completely renovated both dwellings while adding a half bath to front house.

Lessons learned? Challenges?

Rehabbing 100 year old homes takes a lot of time and effort. We did the work ourselves. Again, if you do not have the knowledge or energy to do your own rehabs, hire it out. It will be rent ready much faster.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Katey White with Berkshire-Hathaway continues to be our realtor.

Investment Info:

Single-family residence buy & hold investment in East Wenatchee.

Purchase price: $123,000
Cash invested: $30,000

Single family ranch style home with single car garage and large corner lot. Three bed, 1 bath. 1094 sq ft. Remodeled interior and new roof and exterior siding and windows in 2012.

What made you interested in investing in this type of deal?

Wanted to put money inherited from parent into something that would grow.

How did you find this deal and how did you negotiate it?

Located close to our home, so would drive by it often. Noticed it went into foreclosure. Contacted realtor who helped us with negotiations.

How did you finance this deal?

Cash

How did you add value to the deal?

Completely rehabbed the home.

Lessons learned? Challenges?

This was our first investment property. We did all the work ourselves, except the roof and some of the electric. It was good to do the work ourselves to learn how to do the many things we had to do. However, it took us a long time to get the house completed and rent ready (over one year). Never was in a big hurry to get it rented since we were not paying any mortgage on it. We learned that was the wrong attitude! Time is money. Hire out as much as one can afford to get a property rent ready.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Debra White was our real estate agent.

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I am not sure how to analyze a deal where I am getting the cash to purchase a rental with a HELOC that I will pay 6% interest only for 5 years then refinance and pay off the HELOC. I used the calculator, but not certain I put the numbers in the right places. Any ideas?