House #21 Another Buy and Hold Rental Gem

by Stealthy Rich · Published May 16, 2019 · Updated December 12, 2019

March 6, 2015

House #21 23115 Caloric Censor – Buy And Hold Yet Again!

This time around, we found 23115 Caloric Censor through a wholesaler. We have gotten on the email list of many of these guys. 98% of their deals are garbage, way overpriced inflated ARV values, but sometimes there’s a diamond in the rough, and we found one in this property. It was a three bedroom, two bath property with 1550 sqft in our target zip code, “The Farm”. It was priced right, and we worked them even lower to $80,500. I still remember signing the contract on the hood of my car. The wholesaler had the nerve to try and convince me to write the earnest money check out to him directly and not to title. Yeah right, not fallin’ for that.

Rental House Pictures

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Financing the Rental

Again we used our wealthy friend which we refer to as “medium” money to close this deal fast. He gives us $80,000, and in return, we give him a promissory note and three months of interest at 10% APR. Then after we get the house stabilized, we go out and get a loan from a bank for longer-term financing. It worked great again in this situation since this wholesaler needed somebody who could close quickly so that he could make his money and fulfill the contract. So as you can see in the HUD below, we closed it just fine with the help of our friend.

Cash Buy Hud

Cash Buy HUD

Refi HUD

You can see below that we got a loan for $72,000, which meant our bank valued this house at $90,000 and gave us 80% (80% of 90,000 = 72,000). We then used that money and a little more from our account to pay our wealthy friend back, plus his interest which totaled about $81,315.

Rental Time

We got this property rented in no time for $1,145, to a stripper named Jade. (We got a lot of rent in small bills). Funny story, as soon as she moved in, we had to replace the toilets ($400) because those scammy wholesalers spray painted the inside white to hide years of rust and ruin which came off as soon as the toilets were used for the first time. No problem, we got new ones up, and we were good to go. After all the expenses, our all in on this one was $82,937, which yields a sleek rent/price ratio of 1.38. (1,145/82,937). Smokin hot.

Update: That tenant is now in the army :).