I’m referring to my previous post titled “Now is the Time When Fortunes Can be Made…” I had just bought a darling three bedroom, one and a half bath foreclosure on a quiet cul-de-sac, and I was pretty excited about it. I purchased the house for 35K and knew I’d have to put about 5K in it to get it in rentable condition, but all the homes around it were valued (according to Zillow.com) at about 80-85K. What a great buy!
So the rehab is now finished, and I was actually under budget on the rehab, which is a nice surprise. Thanks to a tip from a good friend of mine, I was able to buy some of the items I needed from the Habitat For Humanity Re-Store. It’s a big warehouse in downtown Indianapolis, and when people are redoing their kitchens, baths, or just want to get rid of some furniture or decent appliances, etc., the Re-Store will pick them up and re-sell them.
I was able to purchase a couple of bath sink vanities with sinks and faucets, a stainless steel double bowl kitchen sink, some laundry room cabinets, all for less than half what I’d have paid at Lowe’s. What a deal! From here on out, I’ll be shopping there first.
This kitchen had no cabinets or counter tops when I bought the house.
The tile above the counter top area was still intact, so I bought cheap, unfinished cabinets and stained and varnished them myself. The counter top had to be ordered but only cost $200. The guy I had helping me charges me $20/hour for his time and he does great work . . . however, he works full-time so I had to be patient. He did the work for me late in the day or on the weekends.
In fact, it looks so good I’m going to put it up for sale for two months. I checked the comps in the area, which are comparable homes which are on the market or have sold over the past year or so, and 1) the neighborhood is very stable, not many houses come on the market and 2) when they go up for sale, they don’t take long to sell.
My strategy will be to list it for only two months. We’re heading into winter, which isn’t a great time to sell a home. Two months are plenty of time, and I know it will rent quickly for at least $850/month, which will give me a 12% return on my investment, according to the worksheet I’ve included in my book, The Landlord Chronicles.
But my investment strategy has always been to pay off debt, and own everything free and clear. I just don’t like debt. But when you own 27-30 units, debt is unavoidable. So I live with it. But I always have my eye on the long-term goal. And if I can sell this house for a reasonable, under-market price, (maybe 70K) when I only have 40K in it, that’s a hell of a profit in a couple months’ time. I think it’s worth a shot . . .
I’ll keep you posted. Onward and upward! :-))