Rental House #29 – Having two Houses on the Same Street
February 2016
290,03 Dogtrotted Linens
Rental House 29 was on the same street as House #28. This was the first time we’ve had two houses on the same street. Now we felt big time for sure. We found this one on the MLS as it was underpriced from the start. We called the agent immediately and begged him to take our full price offer at $90,100. House already had a tenant who was renting at $1,215 per month. For those of you keeping score at home, that’s a rent-to-price ratio of 1.35. (1215/90,100=1.35) Sick!
Rental House Details
This home was built in 1983 and has 1,435 sqft with three bedrooms and two baths. Classic “Stealthy Rich” house.
Rental House Pics
These are the saddest pics ever, I know. We’ve been super lucky and had the same tenant since 2016. Therefore, we’ve never needed to take pics of the home. These were pics that we got when we bought it…
How Did we Finance This Property?
We needed to close this one quick, so we used our “wealthy” friends again to lock this one up quickly. A quick refresher on how we partner with our friends. We offer them 10% APR on their money and guarantee at least 90 days of interest. In this case, we were not going to flip the house, but instead, re-finance it into a longer-term note with one of our favorite regional banks for 20 years and rent the heck out of it.
So to keep the numbers easy, we borrowed $100,000 from our buddy. After three months, we owed him $3,561.64, which we paid in equal parts each month. After the three months were up and we had our long term financing in place, we paid him back $103,561.64. Smooth as can be.
Refinance and Repairs
Luckily on this property, we had zero repairs or rehab at the beginning, as there was a tenant happily living their life and paying rent on time.
We worked diligently with one of our favorite small regional banks and got a 20-year loan closed in April 2016 for $100,000 at 5.125%, which equaled $671.04 per month. As you can see from the HUD below, we received $98,459. This means that overall we walked away with $98,459 (refi amt)- $90,884 (purchase price) = $7,575
REFI HUD
Let’s Do the Numbers
This house rents for $1,215 in 2016. That makes this house a 1.35. With a $671 a month note, that leaves 1215-671 = $544 to cover taxes insurance and expenses. In reality, this provides about 200 dollars a month cashflow for us. Awesome. As a little look into the future in 2019, this house now rents for $1,275
Networth Update
This house was about 40k below market value. We are moving ever closer to the $1 million mark.
