2nd Buy and Hold - Residential Property

[Jeffrey Gignac]

I've successfully owned and managed a cash-flow positive residential property since 2012. After paying down personal and mortgage debt and getting my financial ducks in a row, I have begun the hunt for another house in the same general area as my 1st house. I am looking for similar specs in size, amenities, purchase price, etc. so that I may duplicate the blueprint from my 1st house as close as possible. My ideal property is a 3/2 or 3/1.5 that could be easily converted to a 2 full bath house. Both a small university and a reputable elementary school are within walking distance of my first property. Like everyone, I am interested in getting a deal (it is investing after all), but my largest concern is the speed with which I can turn a new purchase into a cash producing property. 

I've seen one property that meets this criteria that has been on the MLS for over 500 days!!! It is a classic victim of having been bought right before the bubble popped and the owners have 0% chance of selling the house and getting what they paid for it. To boot, the owners have not lived in town for several years and long distance landlording has not gone well for them. This is information gleaned from neighbors and close associates who know the owners.

Rents for the area in question are trending up and comps are being rented for over $1,100. My first property is on the same street and is renting for $900, which I will use as my assumption of rents for conservative estimates on the project. Paint, wood floor refinishing, and a small section of water damaged ceiling are the repairs noted from my first walk through with my agent. My realtor is currently doing homework to learn more about the property for things I would not see on first glance. I'll be giving this property my 2nd walkthrough next week and after nailing down renovation costs, would like to make an offer. I will keep this post updated and any thoughts, comments, or questions are appreciated!

JDG

[Jeffrey Gignac]

UPDATE #6:

Through miscommunication with the vendor ordering the carpet, only a portion of the total carpet needed was ordered. The remainder of the carpet is set to be delivered Thanksgiving week with installation to take place the following week. The installer properly measured the carpeted area, with Lowe's not ordering the correct quantity of carpet. This has been about the only hiccup in the renovation process thus far. I was unrealistic about the turnaround time from the home, but part of the blame goes to my laziness. Alot of the odds and ends I find myself working on right now could have been completed much sooner, but work, recreation, and life have managed to jump in the way of my progress. Must stay diligent to the END!!

Remaining items to be addressed before listing this home for rental:

• Remove and replace downstairs bath vanity and medicine cabinet.
• Ensure all light switches, receptacles, and plates are uniform white throughout.
• Ensure working condition of all tubs, sinks, and faucets.
• Replace old/broken/dirty light fixtures inside and outside the house.
• Replace motion-sensor light outside back of kitchen.
• Replace/repair tube lighting in kitchen. (Buy covers for lights)
• Continue to tidy up front and back yard. (Remove leaves, ivy, other vines)