Closed today - Pics of our latest SFH

[Kel S]

Today we closed on our 5th investment property. This one is a 3/2. 1584 sq ft. No basement. Garage and large backyard in a good area. We are trying to decide if we should rent or possibly try and flip this one.

Pictures are here if anyone wants to see them. http://www.facebook.com/album.php?aid=272890&id=612887141&l=b9a06c3437

[Scott Hubbard]

Originally posted by Kel S:

Thanks Scott.

Here are some numbers.
Purchase price: 21,500 (had to subtract for the bank paying taxes)
Estimated rehab cost: $8,000
Monthly Rent: $850-895

I was thinking about the flip idea. I would think we could rehab this and flip it asking $49,900 -$55,000. I'm making a broad statement because flipping isn't my forte and I'm pretty ignorant in that area right now until I get experience under my belt.

The more I look at this house the more possibilities I see with it. If you go back and look at the pictures of the family room. It has the fireplace, bathroom w/shower and a sink and bar in the main part of the room. I could see that room turned into a studio Apt by creating a kitchenette. It technically could have a separate entrance. That is one reason I want that bar/sink out of there if it's going to be a rental because I'm sure a tenant would think of that possibility also. But would be neat idea if someone bought the home instead of renting and was looking for that kind of set up.

But then again, I don't know what the city policies are on that and would have to check into it. Because the utilities would not be separate and so it wouldn't be a duplex. But if you own a house I don't see why you couldn't rent out a "room" if you wanted. Am I wrong about that?

In any case, it's just an idea. Before I go tearing out that sink I wanted to see what you all thought first. Is there benefit to leaving the sink (it's the small one near the bar if you look a the pictures).

My husband also thought of turning the family room into a 4th bedroom. But that would make it a HUGE master bedroom and I'm not sure if there is any added value in doing that?

Those numbers are absolutely stellar. Even if your numbers were in the least bit off, you could easily buy two of the properties, rehab and sell, then use the proceeds after taxes to pay for a single buy and hold.

Then, rinse and repeat.

This would help preserve your precious capital and allow you to turn your activity into more rentals than you otherwise would.

The drawback is it is a lot of work, but I find fix and flipping more rewarding than just holding.

I am not a big fan of repurposing an existing into a mult-family unless absoultely necessary. Your numbers stand on their own as a SFR rental plus there is something to be said for keeping it simple.

When you go to resell, your buyer pool will be limited. There are usually issues with permits, zoning, and the tax and insurnace men will want their cut.

Of course, if the neighborhood supports this type of property, say close to a college or university, then that would be a different story. You will know your market best.