First Purchase and Rehab. - First Post Here

Hi to everyone. I just came across this forum and I already know I will be spending many hours here learning. So thank you to everyone who is willing to share!

I purchased a single family 3 bed\1 bath from a wholesaler in a larger city a little over an hour away.

I ended up by it for just under 10K and I will end up with 5-6k in remodel. The rent should be no less than $560. Property manager is 10%. Purchased on credit card since my credit score is over 800 and I locked in 4% financing.

The neighborhood is excellent with a home owners association rebuilding the area across the street. Comps are in the 45K range, although I would need to put another 10K into it if I was flipping it to a homeowner.

So is this a good deal?

Assuming the due diligence is acceptable, this is a very good deal from a numbers standpoint. Here is how I see this deal:

Gross rents: $560
Operating expenses: $280
NOI: $280

Debt: ($16K, 30 yr, 7% NOO): $106

Cash flow: $174

Good Luck,


Whoa - excellent #s. Where is this area where you can purchase at that price? The bottom line is the leasing/rental contract being solid gold if you are an hour away. You have no vacancy variation with a single family - but I would have done the deal as well. Interview several property managers and expect the best not to be that great. From one newbie to another - you are on the right track. I look forward to hearing about your progress.

Thank you for the feedback. This is fun!

The house just finished up. I have a realtor going to it on Thursday, but from the comps we are looking at like upper 50’s.

So I think I have a great exit strategy as well.

I would love to flip this one for even 40 and then buy my second one. I have a wholesaler who has 2nd house at about 10K with closer to 10K in rehab. It would rent for about $550. The house right next door is FSBO at 45K. So exit on that one could be in the 40K range. It is a bigger house, but that also cost more to rehab. It is closer to college thus the rent is tougher and more potential damage?

I decide to list the house at 58,000 while I am hunting for a renter.

I thought it might be worth while. If no bites then I still have good cash flow.

Something funny here…

Now my realtor came back and said that the listing should only be 39K. He came up with a laundry list of worries on the property.

I don’t get it. Is he trying to screw me?

Rent it. You have a cash cow there and there is no reason for you to sell it. Wait to sell until the market is back on it’s feet. You bought that house at the same price range that I buy at. Rent X 30 minus repairs. I have to look very hard for those deals. It’s a nice investment that you should hold on to until the timing is right to sell which would be at the top of another bubble.

I am renting it, but would of been nice to turn it.

I have several others in this same price range that I can buy. I just got tapped out.

Currently, have another one that is available for 9,500. Needs 5K fix. Rent for about $500-$525 a month.

Are these properties loaded with judgments ad liens?

No they are free and clear.

Sounds like you are in an awesome market that’s going to make you quite a bit of cash! Especially if you were landlording. Flipping or wholesaling is pretty much using your credit to buy yourself a job. You don’t have the writeoffs and have to pay full boat to the tax man. Deals in this range are what I look for and a house rented and bought at these prices will pay off a 15 year loan in 5 years considering all maintenance, taxes and other expenses.

Great stuff you’ve got there for landlording. The key is to own one or 2 outright. That way you can put a loan on the house you own outright and buy another. Now the next one is owned outright because the loan is on the first. So you put a loan on it and buy another. Time and time again. Once you own one or two outright you can grow very quickly and have your tenants pay off the 5 year mortgages, taxes, repairs, etc.

Thanks! That is the plan.

Well, I finally got it rented on Friday, June 12th for more than I hoped.

It rented at $585 plus $300 for the deposit.

Although, I had some “unexpected” expenses with plumbing that needed to be done plus the mowing was really starting to add up.

So after all the bills less the rent and deposit. I still needed to put in $300 additional cash for that plus the normal mortgage payment. So I ended up negative cash flowing for the first 45 days. But, I am super excited for the future!

Thanks to all!

I wouldn’t sweat it. Sounds like you got an awesome deal and you’re starting out right. Great job! Congrats!

Another update…

I drove by the house the other day. First time since tenat in the house. Remember I am a little over an hour away and just let my propert manager do the work.

Anyway, it looked awesome. They had put potted flowers all over the front porch and a nice bench to sit on. The yard was well maintained.

It made the house look cozy!

Very proud landlord here!

Great job! There is a term, “House-Proud” that maybe translates into English as “Pride of Ownership”. It’s nice when you can drive by and think, “It’s mine. It looks good and I did it.”

Let us know what your next conquest is.