Rental House #14 – First Jump into Duplexes
8-2014
Rental House # 14 – 22204 Loaf Smallness
Time to get to 14 properties. It was amazing to think we were about to reach that number of houses after just two short years. 22204 Loaf Smallness was a little different than our previous homes, however. This house was a duplex, and in Texas, duplexes are weird. In our area, each side of the duplex is a separate address, therefore, a separately platted property that can be bought and sold. We only were purchasing half of this duplex. This fact also scared us a bit. What if the other side is a total dump? What if they have a roach infestation? These are just some of the questions that went through our minds as we considered this deal. We found this house off yellow letters and were ready to get it closed.
House Details
The property was also only a two bedroom two bath house with 1,158 sqft. That was somewhat worrisome to us as each of our former homes were either 3 or 4 bedrooms. Would this house be as desirable? Could we rent it as quickly? We settled on a price of $51,500 with 1500 back at closing, so a total of $50,000. This house also came with a renter as a bonus, and they were paying $725 a month. (Happy ending – in 2018, this renter is still there, now paying $1000!)
Financing
For the financing on this deal, we financed 80% with our favorite local bank. It was a loan for $41,200 at a rate of %5.125 for 20 years. Our payment was $276.48 each month. That’s super impressive on $725 a month rent.
Pics
Now for this one, we don’t have any “nice” pics because we’ve never had to list it! These are just the lame pics we got when we bought it. I guess they were good enough to convince us to buy it. 🙂
Photos update for 2019
We had the original tenant finally move out after five years of us owning it. The place needed some work, so we painted it, replaced the floors, and changed out the countertops throughout, and also a tub surround. It will be good to go for years to come.
Let’s Do the Numbers
| Line Item Detail | Amount | Comment |
|---|---|---|
| Purchase Price | $51,500 | Slam dunk! We also got $1,500 back at closing so Total price is $50k |
| Down payment 20% used portfolio loan at local bank | $10,300 | 20% down on a portfolio loan at 5.125 |
| Closing costs | $1,033 | Closing cost -after all pro-rations and deposit transfer and seller contribution |
| Total cost of deal | $52,533 | |
| Anticipated Rent | $725 | |
| Monthly Mortgage | $276 | 20 year portfolio loan at %5.125 |
| Anticipated monthly Expense | $100 | Average of $1200 a year in expenses |
| Monthly property taxes and insurance | $125 | Small home = lower taxes |
| Monthly cash flow | $224 | Good one |
| Rent to Purchase price Ratio | 1.38% | This is a another home run for us. |
Net Worth Update
Added a good $25,000 on this one.
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[…] soon as we got House #14 locked down, we were all ready to go on a second duplex nearby. We found this property through our […]
[…] our first two duplexes under our belt, it felt good to get a “normal” lead again. We were mailing yellow […]