Three firsts for me this week

[Michael Hayworth]

Been doing this for several years, but I signed contracts on two new houses this week that represent three firsts for me.

House 1 - tenant-occupied 4/2/2. My first purchase from a wholesaler, and my first purchase of a tenant-occupied house. I've been approached by a lot of wholesalers with dubious deals. I've watched this particular one for several months now, and his ARVs seem realistic (even  low, in some cases) and repair costs seem in the right ballpark. He was doing a group tour and on-site auction of a house in a school district I regularly buy in. Went just intending to observe, but ended up pulling the trigger. I'll be figuring out the process of absorbing an existing tenant over the next week or two.

House 2 - My first vacation rental! It's 1.5 blocks from Cowboys Stadium. I've been looking for years to get something in this area. Saturday, as I was walking 10 blocks to the stadium for a concert from the discounted $40 parking spots, I pulled up Realtor.com, saw that one had popped up, and bought it the next day. It was priced a little high for a basic 900 sf 2/1/1 in that are, but as a vacation rental, the cash flow should be excellent. I'm very excited about this one.

[Michael Hayworth]

Guys, don't sweat the vacation rental deal for me.  :) My total expenses with mortgage, insurance, property tax, repair reserve, and the 10% reserve I put in for management, even though my staff manages my properties, will be around $800/mo. 

The Cowboys draw from a multi-state area. People come in from all over and need a place to stay. The whole appeal of a vacation rental is having a house, with a patio, backyard for grilling, parties, etc. And there's no other vacation rental on AirBnB or VRBO that is a 5-minute walk from the stadium.

Plus, Jerryworld pulls in top college games, which draw fans from all those schools, and the biggest concerts in the region, which draw people from hours away (at the Kenny Chesney concert last week, we were hanging out with a group of 18 people who had driven 8 hours to be there) . I'm hoping to get the place renovated before the Taylor Swift concert in a couple of months. Then there's the Texas Rangers (I can't imaging driving hours to watch bad baseball, but some people do) and Six Flags over Texas, both within a  mile. 

There are 15-20 events a year that will generate in 2-3 nights what a normal month's rent would be for this place as a single family rental. plus lower rents over the summers just for families coming to Six Flags when there's no other events. If there's any event where it's NOT rented for some reason, I'll send a couple employees over there to park cars in the yard at $50 a pop.

(Not to mention, the the next time we get the Superbowl, it'll rent for ridiculous rates for a single week.)

I'm very hardnosed about not accepting unrealistic income assumptions on a business, but I'm thoroughly happy with all the numbers on this house.