Nine months ago, I “threatened” to sell my rentals at auction and quit the business after a challenging tenant. But then I did what I normally do when I get discouraged being a landlord (have a glass of wine, lol). I got online and looked at how much equity my tenants have built for me. So, I cleaned up their filth, ran my ads and rented it two and 1/2 months later (it was the first time I ever lost a month of rent but the stink from the unapproved additional three animals was hard to cover up. Potential landlords..don’t get discouraged. This was 1 of 7 tenants that was “bad” which is NO BIG DEAL. It is to be expected in this business and really in the grand scheme of things, it could have been much worse).
Anyways, I recently woke up two times in middle of the night tossing and turning thinking about what more I wanted to do since I sold my store and turned on the TV to find Dean. There he was reiterating my belief in the real estate market. I got the book the day after the second time (and said to myself all right dam--t! .I guess this is what I am supposed to do). Today, just about 30 days later I have an accepted offer on a REO.
Ironically, it is a home my father owned about 7 years ago. The gentleman he sold it to for 118K lost it in a foreclosure. It was appraised at 120K when foreclosed on. (I think that is a little high in our current market). The bank listed it for sale @ $83,994. I was the first one to see it before it was even priced as I happened to be looking at another on the street and the realtor mentioned there was another on the street that was not “listed” yet but did have a lock box. I told her I thought I knew which one it was as I have been tracking all the foreclosures in my area and knew that one should be coming up soon.
Quite honestly, it was a deal at that price and I was a little torn about what to offer as a different one I looked at in the summer (sort of for fun as I had not received the “sign” yet and was not mentally prepared to get into the business further) had ended up selling OVER the bank’s asking price but being the frugal person I am, it is not in my blood to not make an offer. I ended up offering 74K, we countered back and forth 3 times and settled on 76K cash. I hope I can get the money by the 31st or I pay $50/day. My financing is creative as well so I am a little nervous but I did get approved for owner occupied as a backup plan (I was quoted 3 points higher for investment, UGH.If anyone can lead me to a great lender for the future, I would be appreciative. I have a 780 credit score and am experienced but I will be over the 4 mortgage mark. I know this makes a diff..you super veterans must have some advice on what to do over 4 mortgages).
It should cash flow ATLEAST $200, maybe $300 as I have a similar home that rents for $975 and I feel very confident that I could re-sell it for 95K by tearing down the old blue and mauve wallpaper in the kitchen and bath and painting the whole place neutral and getting the carpets cleaned. It needs no major work and get this, it has ALL the appliances, even a washer and dryer my dad left that were pretty good..heck that ought to be good for $40 month. But I plan to hold it and think 120K WILL BE realistic once these foreclosures dry up.
Sorry for the book. I hope I inspire someone else and thank you to everyone else for their sharing! I’ll post when I close and look forward to hearing from anyone who has suggestions for future loans.
"Whether you think you can or can't, you are probably right" Henry Ford