The 37 year tenant (#14)

The 37 year tenant (#14)

2015-06-10 10.50.04

 

Features

  • Duplex
  • ~2000 Square feet
  • 2 bed 1 bath per side
  • MLS listed

Financials

  • $52,500 purchase price
  • ~$0 rehab cost
  • $615 monthly NOI
  • 14.35% ROI
  • $60,000ARV ($7,250 in net equity after rehab)

Investment diary

This is one of the few potentially ‘hands off’ deals we’ve had. A traditionally listed MLS duplex, no distress, just owners tired of managing a rental property.

There appears to be no rehab needed. The noteworthy thing about this rental is that one tenant has been in the duplex for over 37 years! Pretty amazing, we will be the seventh landlord she’s had since she’s lived there. We plan on being the last since this seems to be a great money maker.

Blog from the car #1

Well, we are at the start of another week. The past few weeks I’ve been pretty good overall. Hopefully we will stop burning through cash reserves at the pace that we have the past couple months. We went over around $10,000 on the rehab on property #12 and likely will go a little over on property #13 thankfully, the business has been very strong. I’ve had a couple tenants come back late on my rent.

Last week we received new Capital from a brand new investor partner. I am really excited about the future with this investor as well as the infected will have on our existing business. Operations likely will only be able to slip two more properties through the end of the year. This is because the bank still difficult to work with. They are requesting two to three years of seasoning on our existing properties.

We are about through the year now and so far imagined. I had hoped by the halfway mark we would be up to 30 properties instead, we’re still at 18 units, the same number that we were at during March. With the offer I put in today and the extra property I am viewing tonight if we were able to purchase then they would take us up to a total of 14 properties consisting of 21 units total almost halfway to our 2015 goal. Our 2015 end year goal is 50 total units.

Cash flow from these new units looks to be very similar to where we are at now, the duplex will be quite interesting though. They are asking $50k for it with a total of $935 and income. This is a little low compared to the current houses however we may be able to get the rent up. Interestingly enough one of the tenants in there has been living for a 37 year exclamation.

I would like to raise the rent on this tenant a little bit so we can get closer to the $1100 mark. Locally this is a very fair amount. I am seeing more and more two-bedroom units rent out for $600 to $700 dollars a month. This is significantly higher than our average two bedroom unit which sits right around $500 per month. It means that when we have to replace tennants I expect a sizable increase in the amount of rent we collect. I am NOT one to raise rent significantly existing tenants.

If this, I do believe that by September we are looking at 35. I am looking at a quad plex as well

This week in review #82-87

So, 5 weeks has passed (The entire month of February) since my last post.

Feb was much better for us than Jan, no property theft, no major issues other than LOTS of frozen pipes. We’ve managed to rent out all of our units as the end of the month approached.

We did have to reduce our rent on #12 by $50/mo to $550/mo in order to compensate for the terrible weather we’ve been having. Other than those issues things continue to go ahead. Property #11 is continuing to be worked on, there were major issues with the electrical that needed fixed, and we have now got them all taken care of.

 

 

The pooper (#13)

The pooper (#13)

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Features

  • Single Family
  • 1,200 Square feet
  • 2 bed 2 bath (Will be 3br/2ba when renovated)
  • MLS listed foreclosure on the wrong MLS system (Out of town MLS)

Financials

  • $15,500 purchase price
  • ~$10,000 rehab cost
  • $420 monthly NOI
  • 19.8% ROI
  • $40,000ARV ($17,250 in net equity after rehab)

Investment diary

This one has taken a bit longer to rehab than we thought. One of the more interesting incidents with the house was that a few weeks after purchase it was broken into. Nothing was stolen or damaged, however the intruder decided to poop on the floor. This incident managed to make it to the top of the /r/trashy subreddit.


Property photos – (Pre-Rehab)

This week in review – Week #81

This week has been quite trying. Lots of disappointment all around concerning the properties (And this will be one of the most pessimistic blog posts on here).

First in the week – The bank (The third bank now that I’ve approached for loans) turned us down on refinance of a few of the properties. The loan officer’s statement to me was that the board wasn’t a fan of the company having investors. I really can’t fathom the reasoning behind it, however their statement to me was that they ‘disliked an equity partner situation’. Even though I have controlling share and control of the company. Maybe there’s a secondary reason behind it but I’m unsure. Going forward I think I’m going to come up with a much more cohesive loan package to present to loan officers do I don’t spend as much time on it as I did this time around.

Second in the week, the property we’re working on (#12) was broken into, and about $1,500 in tools stolen. We really can’t claim it on insurance as the total recovery amount wouldn’t be enough to suffice on the potential premium increase. Right now we’re spending a little over $900 a month on insurance, and really don’t want to see it increase any more as we’d be paying the increase over too long of a time.

The bright news – The bank (The one we’re actively working with) called me Friday stating that we’d close on the refinance on Tuesday. This one will cash out another property to pay off our line of credit. This is good news as it’s taken a month to do unfortunately. The funds will go to pay down our active line of credit to <$25k. They would like to see us pay it off before we utilize the LOC further. They also want to see our tax return for 2014 so they can decide where to go. I hate the idea of having things up in the air so much that I can’t solidly say where the purchases will go.