Dos Mas (Two More Rentals Purchased Today)

[Michael Rossi]

Recently, there have been a lot of questions about how to find deals. Here is the short version of how I bought two rentals today (the long version in on my blog).

I was being lazy this afternoon and watching TV. The phone rang and it was one of the investors from my local REIA. This investor had two properties that were involved in a major drug raid and this made the front page of our newspaper yesterday. In the same 24 hour period as the drug raid, someone crashed their car into another one of her rentals. She has had enough and wants out. She called today to see if I was interested in buying the two from the drug raid. I said yes, but only at my price (about half of market value). She agreed to sell me both of these 3 bedroom houses for a TOTAL of $50,000 (market value about $100K).

Within the hour, I met her at the properties and signed the contracts.

The key to getting these deals was that people know that I am a serious buyer. This particular deal came from another member of the REIA. Other deals come because a realtor knows I will buy distressed properties. Others come because local bankers know that I will buy foreclosures. You get the idea. It is all about getting out of the house and meeting people.

If you're wondering about the numbers.

Total purchase price: $50K
Market value: $100K (very conservatively)
Gross Rents: $1,100
Operating Expenses: $550
NOI: $550
Mortgage Payment: $316
Cash Flow: $234 or $117 per unit per month

Mike