Side by Side
The Basics of the Deal:
“Side by Side” was purchased for 58K and was listed as 2 SFH’s on single lot. Both houses were listed as 3/2’s with carport parking.
We called this “Side by Side” because the houses sat to the left and right of each other. The top picture is on the right side and the bottom is on the left.
This particular deal was our first purchase via an online auction. However, it should be pointed out that we had actually been watching this property for almost 12 months before we won it at auction. It kept going into and falling out of escrow time and time again.
Expected and Initial Plan:
We initially expected the houses to cost about 12K in repairs. We converted a den in each house to an extra bedroom and we wanted to create privacy and yards for each house.
Given we were creating 4 bedroom and 2 bath houses with privacy and decent yards we felt we could get between $900 and $1,000.
Actuals:
We ended up spending just under 11K and we actually got one unit rented for $900 and one rented for $995 for a total of $1895. The units rented within 10 days of completion.
Current Status of Property:
The tenants have paid like clockwork and are still happily in the property. To date we have had no additional surprises.
Lessons Learned:
Sometimes you have to watch a property for a long time before it makes since (This properties intitial asking price was over 150K). Do the work and create the tracking sheets and don’t forget to track houses that our just outside your criteria.
When we picked up the property there was essentially one big back yard/side yard, which was interesting but not ideal. Instead we created fenced and secure yards for each house thus providing defined space for each tenant. I am convinced this gave us an Extra $100 a month and aloud us to rent them much faster. One big yard would have been a problem for sure.
Just because a property ends in an auction scenario doesn’t mean it is a junk property or a bad deal. But make sure you watch your numbers, don’t over pay and don’t forget the “Vig” (aka buyers premium) you pay the auction house.
Grade the Deal and Why:
We give this house an A+ as we came in under budget and created two 4Bd/2bth’s with defined spaces producing monster cash flow.
Future Plans for Property:
The property is in a solid rental area and we plan to keep it long term. We will buy all the properties we can find like this deal!!!
In the mean time we will be looking for ways to strip off a small piece of equity via a bank line or private money as we only owe about 28K on the property.
