Fruits and Flowers
The Basics of the Deal:
“Fruits and Flowers” was purchased for 51K and is a straight up boring duplex with 2/1 on each side and separate laundry room.
We called this “Fruits and Flowers” because the property sits back a ways on the lot and the past owner filled the front yard with Roses and Fruit Trees. There must have been 2K in plants just in the front yard. The neighbors like the yard so much that they took ownership of watering the yard with their own hose as the property was in foreclosure and empty for almost 1 year. Can you imagine? The neighbors took the time and expense to keep the yard looking great because it was that beautiful. Crazy I know.
The units needed heavy cleaning and some repairs to the kitchen and laundry room. We also expected some surprises given the time the property had been vacant.
Expected and Initial Plan:
We initially expected the duplex to cost 10K in repairs as it needed the basics of carpet, paint, yard work and we thought there might be 2k in surprises given how long it was vacant. We thought the place would rent for between $600 and $650 each.
Actuals:
We ended up spending close to 14K as we ended with some additional roof work that we didn’t expect or see until we got on the roof. We ended up getting $650 for each unit. We also decided to give a $50 credit to one of the tenants to keep the yard looking great. Meaning watering the yard, etc. This aloud us the freedom to know the yard would continue to look great from the street.
Current Status of Property:
We still own the property and are happy to report that the same families that moved in after we purchased it are still in the house and happily paying the rent.
We did perform some extra work on the pipes for plumbing that cost about 2K as tree roots were once again involved. Tree roots search out for sources of water and when they get flush with a new water source they grow and boom your pipe breaks. Not good but we planned for it this time (It took about 6 months for the issue to crop up this time)
Lessons Learned:
Remember properties that are vacant for a long time will have surprises.
I am convinced we rented these units fast because of how attractive the property is from the street. Both units rented inside of 48 hours of posting sign.
Don’t be afraid to offer a rent credit if you can get a greater value than the credit amount.
Grade the Deal and Why:
We give this duplex an A- as we came in slightly over budget and we rented the units for what we expected.
Future Plans for Property:
The duplex is in a great area and we will keep for the long term. We will look to extract a small sliver of equity via a bank equity line or private money loan as we only owe about 25K on the duplex and thus can secure a small 2nd without risking security of the property.
