Closed on my first rental property Illinois - TINY HOUSE

[John Robinson]

Started learning about Real Estate Investing when I started with the first MorrisInvest podcast about 4 or 5 months ago.  Heard Clayton on an episode of This Week in Tech where he mentioned he'd be starting a podcast, listened to his thrice weekly podcasts for a few months - people kept mentioning Rich Dad/Poor Dad (I book I avoided reading for years knowing I'd kick myself once I did - big surprise there - I kicked myself about 3 months ago when I finally read it) and BiggerPockets so I finally made my way here.

   Signed up for PRO after about a week on the site and started using the Rental Property Analyzer, which if you haven't played with - do so today.  Even free accounts can use it 5 times.

   Got the wife on board, had a plan and started analyzing properties.  I'm going to be opening a new location for my business on November 9th and needed a property for my son to stay in while getting the shop off the ground the first year.  Figured if I can find one, have him fix it up while staying there then use it as a rental unit I'd be killing two birds with one stone.

   Searched Bloomington/Normal, IL area near Illinois State University.  Knew I wanted a property kids could walk to class to.  My son had just graduated and was wasting $475 a month for a run down disgusting apartment with 3 other friends ($1,900 a month) - parking was an extra $100 a month for 2 of the renters.  

Visited many hopeful properties - hard to find any that were in a REALLY good location though. Lots of great deals that are 1+ miles from campus - didn't want to go that route. My biggest worry with REI was finding tenants (over the years, I'd seen so many vacant homes waiting for someone to rent them). My son had originally wanted to rent a home with his friends but all of the close ones were always snatched up! Made offers, got turned down - saw units that needed TOO MUCH work for my experience level - found one hopeful home that needed a new roof but again couldn't get to the right price.

   Finally found this crazy small 700 square foot home at 22 University Court in Normal, IL.
2 bed/1 bath
 Closed yesterday:

Paid $74,500
Monthly rent = $1,000
if I use a Property Management company I should cash flow $372.67
if I foolishly try to PM it myself it can cash flow $472.67 - but I live an hour 45 minutes from here so I doubt I'll be doing that.
Cash on Cash ROI is 5.56%

 While most families would NOT want to live in such a TINY HOME - it's ideal for college students as they will have low cooling/heating expenses from such a small dwelling.  Also has 1 detatched garage.

I realize this is smaller/lower than what most people would consider worth their time/trouble - but it's gotten me started fairly quickly, takes care of 2 problems at once and gains me invaluable experience points.  At 49 years old the clock is ticking and it feels great to put something else in my ASSETS column.

   Once the home is rented out, I plan on refinancing and taking the money to move on to my next college town property and grow my portfolio with 1 or 2 properties a  yeary (hopefully multi-units for the next ones)

 I appreciate everyone's transparency on the boards and wanted to share as much information as I could as well.  I find having hard numbers/facts really helps me, hope this is of some use to others out there!  

If anyone has any questions - just shoot!

John