thefed
Thinks s/he gets paid by the post
- Joined
- Oct 29, 2005
- Messages
- 2,203
Today I went to look at a house that's very very cheap and in a very nice neighborhood. SO cheap, that I HAD to look at it to see why. Well, I don't see why. Don't get me wrong....it's a mess...but very fixable. I always look for the property that's such a deal it's a no-brainer...and it's taken me 2 yrs to find this one.
I have already fixed and rented 2 homes. One I bought for 12k, and have 22k invested after renovations...yes....22k. It's in the sorta-hood....and the tax value is 45k. The other I bought for 24k and have 34k invested. It's in the hillbilly hood, with a tax value of 59k. Each one is rented at $600/mo.
The one I saw today is in my town, in a more desirable location than my house(desirable to ME...which means a bit more rural....although you can still get to the major city within 10 mins.)The lot is .7 acres. It's essentially a total 'gut', except the following: siding, electric, and 300 of the 1100 total sf. The 300sf is an addition put on in 2000...vaulted ceiling in the bedroom...very nice. There's also a 3 car detached garage that's in usable shape, but no door. The tax value of this home is 78k. It's a bank owned repo on the market 30 days, reduced again to $13k!!!! Come on! $13k!!! It would rent for about $650/mo. Yes it's wet, needs a new roof, needs 75% new drywall,cabinets, bathroom, flooring, etc...whaddaya expect? But I do 80% of the work myself so I save a TON in labor.
So what's the problem? Well...financially I'm in a bit of a rut as my business has slowed down (duct cleaning). I JUST tapped into my savings for the first time ever. EVER. And it's eating me away!!! In about 2 months my lawn care business will be in full swing(which could be an issue as I'll be working 50 hr weeks), and that will cover expenses by itself til nov when duct cleaning goes CRAZY for 3 or 4 months...then the late winter/early spring lull... then rinse....repeat.
I also have a child due any day now, and a hormonal wife who would kill me if I bought another property. She wants me to wait IDEALLY forever, but she'd probably be okay if I wait til business pick up, the baby is here, I have more free time, etc. (read:next winter)
But I'm thinking for only $13k I could buy it and let it sit for all I care. It'd cost me about $130/mo in interest and taxes to carry the property(I'd use HELOC from the other rentals to keep cash reserves intact...can lock in at 6.25% right now)...and I could work at my leisure on rainy days etc...ramping up to full speed come November....
I mean, $13k is CHEAP. She just paid more for her van. the only UNKNOWNS on the property are the well and septic. Sometimes with a well,if you don't use it you lose it. And worse case the septic needs replaced...tank, leach bed, and all. So I'm assuming they both need major work. Even so...I think I can have this home in rentable shape for about $35-40k...and that's a total rehab down to the studs.
What should I do?
I have already fixed and rented 2 homes. One I bought for 12k, and have 22k invested after renovations...yes....22k. It's in the sorta-hood....and the tax value is 45k. The other I bought for 24k and have 34k invested. It's in the hillbilly hood, with a tax value of 59k. Each one is rented at $600/mo.
The one I saw today is in my town, in a more desirable location than my house(desirable to ME...which means a bit more rural....although you can still get to the major city within 10 mins.)The lot is .7 acres. It's essentially a total 'gut', except the following: siding, electric, and 300 of the 1100 total sf. The 300sf is an addition put on in 2000...vaulted ceiling in the bedroom...very nice. There's also a 3 car detached garage that's in usable shape, but no door. The tax value of this home is 78k. It's a bank owned repo on the market 30 days, reduced again to $13k!!!! Come on! $13k!!! It would rent for about $650/mo. Yes it's wet, needs a new roof, needs 75% new drywall,cabinets, bathroom, flooring, etc...whaddaya expect? But I do 80% of the work myself so I save a TON in labor.
So what's the problem? Well...financially I'm in a bit of a rut as my business has slowed down (duct cleaning). I JUST tapped into my savings for the first time ever. EVER. And it's eating me away!!! In about 2 months my lawn care business will be in full swing(which could be an issue as I'll be working 50 hr weeks), and that will cover expenses by itself til nov when duct cleaning goes CRAZY for 3 or 4 months...then the late winter/early spring lull... then rinse....repeat.
I also have a child due any day now, and a hormonal wife who would kill me if I bought another property. She wants me to wait IDEALLY forever, but she'd probably be okay if I wait til business pick up, the baby is here, I have more free time, etc. (read:next winter)
But I'm thinking for only $13k I could buy it and let it sit for all I care. It'd cost me about $130/mo in interest and taxes to carry the property(I'd use HELOC from the other rentals to keep cash reserves intact...can lock in at 6.25% right now)...and I could work at my leisure on rainy days etc...ramping up to full speed come November....
I mean, $13k is CHEAP. She just paid more for her van. the only UNKNOWNS on the property are the well and septic. Sometimes with a well,if you don't use it you lose it. And worse case the septic needs replaced...tank, leach bed, and all. So I'm assuming they both need major work. Even so...I think I can have this home in rentable shape for about $35-40k...and that's a total rehab down to the studs.
What should I do?