Rental House #16 – Yellow Letters again For The Win!

8-2014

Rental House # 16 – 23319 Vented Earwig

With our first two duplexes under our belt, it felt good to get a “normal” lead again.  We were mailing yellow letters to about 500 homeowners twice a month.  Once again, we got a hit on a letter for  23319 Vented Earwig. This deal was a classic story of a tired landlord who had just experienced a vacancy and was ready to sell the house because he didn’t want to go through the process of leasing it again. We might be starting to sound like a broken record, but each of these deals makes us so happy because we know this is the easiest and cheapest way of acquiring property and building serious net worth. The more we can get, the faster we can grow and reach Financial Freedom.

Front of Rental Home

This particular property was a three-bedroom, two-bath house with 1360 square feet – Liquid gold. It was built in 1982 and was very clean throughout, albeit very basic. In our business, basic is good; basic equals cash flow and consistency. This house had simple bathrooms, new carpet in bedrooms, and hard floors in common areas and kitchen. After a good negotiation, we got this house under contract for $82k with $2k from the seller at closing, so $80k total. It was easily worth $110k. We didn’t even have to do anything to it. It was ready to go. The quickest deal we had done thus far for sure in terms of getting it rented and producing cash.

Financing

Once again, we called on our local banker and got a 20-year loan at 5.125%. This loan made our monthly payment $441 each month. The note was for $65,600 or 80% of the purchase price. As soon as we closed on the property, we listed it immediately and got it rented for $1,100. We were so happy as this was a massive win for us. That translated to a substantial 1.38 rent to purchase price ratio. That’s how winning is done.

Rental House Pics

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Let’s Do the Numbers

Net Worth Update

Want to read about more deals like this? See House 15