Home > Updates -6 homes (positive)

Updates -6 homes (positive)

July 19th, 2014 at 10:16 pm

6 homes update.

The house section 8 lady vacated and we are turning non section 8 for a big rent increase.. -Clean up and fix up in the works!! (new paint, light fixtures, faucets, appliances.. *she took hers*, carpet and general fix up and clean out). will increase rent at least $300. trying for $400. To be done Thursday and then start showing immediately!! THIS will be the house I take deed too first (September)

Other house (next door) where lady was late w rent. I talked to her myself and her reduced income situation appears short term. She wants to stay, wants to pay, house is clean inside. I got some $ from her today and expecting the rest next week. She is aware if she does not come up with it we need her to leave asap. I think that will smooth out. I said I want to do some fix up there too.. this will be the 2nd home I take deed too.

Excited to see how these homes turn out and to SMOOTH things out.

Doing a LOT of fix up in the 6 homes.. in past 3 months (3 water heaters, 4 sump pumps, 1 roof and now this whole house fix up, several leaks, lingering issues fixed too). Also completing an outdoor drain system for these 2 homes next to each other (above) and fixed the foundations on them.. (last years posts)

So ALOT.. THANKFUL you guys encouraged me to get a larger emergency fund. thankful I found some good people to do the work (still finding people) and potentially thankful for this new property manager (still evaluating her) and thankful for my accountants support and encouragement

IF (when this works out) I will have 6 fully paid off easy to rent homes in 3 years 10 month time. I am not kidding myself I need to do 2 more roofs (in the near future) and probably will uncover some more mid-large fixes next month (property manager going through each house and making a punch list per house) but if I can survive this year I think it will drastically reduce and improve. I will likely reduce my savings this year to do this.. Budget though with FULL RENT is $750 a month for repairs.. so basically once the large things are taken care of I have $ to nip away at these punch list and rebuild my funds.

THANKFUl I am have a good job too and a fairly easily marketable skill set.

I can not afford a job loss or job break right now so closely watching contract end dates etc from now on..

The 2 3 units continue to plod along (they have no delayed maintenance items) and we will raise rents in the fall. they are paid off in 2019.

I anticipate reducing my rental emergency fund by $5k more in the next month or so to pay for all this and potentialy another roof and the drains (not in yet) but hoping for the motorcycle guy (owes me $6 k.. talked to him Friday) to come through soon and just saving as much as I can each month.. also have the possible sale of car(s) and got $1500 more stuff to sell on Craigs list... ALso next year should be getting a $10k tax refund.

Surviving (crunching numbers right now big time) and looking forward.

Prayers for main home refinance and 6 homes to settle down.

6 Responses to “Updates -6 homes (positive)”

  1. LivingAlmostLarge Says:

    How did you qualify for so many homes and how do you pay off all these rentals so fast?

  2. Rachael777 Says:

    Hi there. The homes and 3 units were bought on 'contract' which means the seller held the financing. I bought all 6 homes from one seller (why they are referred to as the 6 homes and not individually).. and the 2 3 units were bought from one seller. I sought out older sellers or sellers who had 'made their money' and just wanted to sell/get out of hte business (often they wanted to move or retire etc) and I offerd to buy multiple pieces of their 'inventory' if they held the financing. This can be attractive to sellers. These sellers are not everywhere but they are definately out there if you know how to look. I used an 'old time realtor' (lots of contacts in town) to find these sellers BEFORE the homes hit the MLS. I had 'bad credit' coming into this because of in progress foreclosures and seller financing was my only option to get into real estate. Paying them off so fast has to do with the price I paid which has a lot to do with the market at the time, my old time realtor helper and the fast purchase. Before you think this deal is too good though.. since these are on a 5 year payoff I DO have to pay in between $700-1500 a month (out of my pocket) to meet the mortgages and costs. I took thsi on because I have a fairly steady (knock on wood) good income and felt I could afford this. The issue and why things are so tight right now is because I did NOT anticipate having the opportunity to buy my house back from the bank and taking on a personal mortgage until 2018. Having that occur so soon (1/2014) adds extra expenses of approx $3000 a month (hard money loan to get it from the bank, 12% interest) and if you ahve been reading I am now refinancing that loan to 6% so I lower costs while I hold it til I can quality for a normal loan (2-3 years out).. so pretty complicated.. seller financing is an attractive option but taking this on with the purchase of my house and winding up all the other stuff is not for the faint of heart but if it works, I should be in good shape in 4 years and breathing easier (once these 6 homes calm down) in a few months. hte 6 homes deal has some failsafes built into it. One. I can pull out a fully paid off deed every 14 months (one due to me in September). Two if I default and can not recover.. all I have lost is what I put in.. the seller can not sue me . he can just take back the homes and any deed that I have previously gotten (see above) I keep free and clear. Thanks for asking. I took the opportunity to buy my house back from the bank because I was able to negotiate a price with $200k equity and I wanted to 'settle' and start to relax and rebuild. I do not regret the decision but it makes things harder especially the first 2 years of the '6 homes contract' when I have higher costs, turnover, trying to raise rents etc etc as I get these into shape Smile

  3. Maranatha Says:

    Wow, you have a lot going on Rachel, lots of prayers going out your way. It's awesome that you can handle all of that, you are right, it surely isn't for the faint of heart!

  4. Another Reader Says:

    Yay for being able to pull a deed out in September! My guess is your old time realtor wouldn't be able to find you any deals like that today.

    Do you start the new job tomorrow?

  5. LivingAlmostLarge Says:

    Super complicated! Wow have you had previous landlording experience? Also how much is the deed of each house and how much will you have paid in five years? What's the cash flow on each of these deals?

    How did you decide to do something like this? I certainly wouldn't have dreamt something like this but wow. Very amazing and certainly a great retirement plan

  6. Rachael777 Says:

    LAL.. quick reply because dealing with insane new job jitters.. total contract was $275k. I put down $30k. Loan $245k, 3.15%, 5 years. I can pull out a house every $65k paid off. Homes are worth more than $275k so I got a good deal.. but even if they were worth what I paid or less... it was a good deal because I got IN and my goal this time was cash flow only.. these are smaller average joe homes extremely easy to rent.... All homes were rented when I bought. HOmes were in average shape with the past few years the seller not keeping them up (delaying items, not updated etc). I am busy trying to turn them over though, fix them up and raise rents. All were section 8 when I bought. My plan was to pull 3 out of section 8 to raise rents. I am on the 2nd one pulled out now. I DID have prior rentals before that I managed myself. I DO not like management and am not 'suited' to it as I get too stressed. These are managed for me. I had previous rentals in my 20's that were great buys that I sold early and just 'wasted' used hte funds I got from them.. (in hindsight should have held them) and I had 3 other rentals (recent ones) before these that I bought at the top of hte market (looking for appreciation vs long term income) and got caught when the market turned down and then also a legal situation w my ex caused them to be vacant for 2 years and then attached in a law suit and lost. So about it. .wish me well on my new job. I want a work at home job!!!!!!

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