My story

[Jennifer Clancy]

Hello!  My name is Jennifer Clancy and this is my newbie story.  My husband and I became accidental landlords in August 2013, we had the opportunity to live in Australia and we took it.  We did not want to pay a mortgage while our house sat empty and we couldn't sell and make a profit, so we hired a PMC.  As our time in Australia was coming to a close we realized we needed a place to live when we returned to the states.  

I started researching and about a month later we were refinancing our house to a conventional investment which lowered our monthly payment $200 and freed up the FHA loan for our next purchase. I looked for a multi family building that met my criteria: location-safe to walk alone, 3-4 units, 2beds each, and under $300k (the cheaper the better) I wished for a yard, garage, fireplace, more than one bathroom, and close to a lake. I searched for a little over 3 months online and put offers on 4 properties, site unseen.

1) A short sale in hill top Tacoma, a 3 story triplex + detached single family.  It was listed for $220k, after extensive research I offered $130k (for poor area and about $30k in needed repair) my offer was rejected and 8 months later he accepted another offer for $130k.

2) 4plex in South Hill Puyallup on 0.5 acres asking price $350k offered $355k.  The layout of the units was open and had a spacious living area and modest bedrooms, I was smitten with the kitchens.  I had to withdraw the offer after 2 weeks of waiting on the seller who was dealing with a sick elderly wife.

3) 4plex in Auburn asking $450k offered $420k agreed on $430k- I had a pseudo panic attack immediately after our offer was accepted.  I wasn't in love with the layout, the tenants, and especially not the location. After the inspection found that the 6 month old roof was leaking in multiple spots we walked away.

4) 4plex in Edgewood asking $520k purchased for $450k.  We had previously had our realtor look at this property and decided to pass, doors were broken, holes in walls, and it looked dark and dingy.  I couldn't tell what the layout was but I knew each unit was a townhouse, had a detached garage 2bd/1.5ba, ground access to a yard, a fireplace,and it was close to a lake.  

After our offer was accepted we signed our documents at the US Consulate and financed FHA. Because the units were so torn up we knew we had to renovate. We estimated $7k in renovation materials per unit. In actuality it's closer to $10k because of tools, tax, consumable materials, and unexpected expenses (remnants of a slum lord ie: rotten subfloors, 30year old toilets, broken doors everywhere...)

Financially this building has the most potential to make money compared to the others. After renovations rents went/are going from $950-$1050 to $1250-$1350. We hope to refinance after we're done to a personal conventional, drop the PMI ($500/mo), cash out our equity and relocate to South America. It's not a glamorous goal but it will allow us to retire at the age of 30.

Our renovations are as follows:

Laminate $1.99/sqft

20x20 polished porcelain tile($1.07/sqft) w/backer board, thinset, grout $2.85/sqft

9' Granite counters $115 pc

Low flow toilets $135 pc

Low flow Delta showers $200 pc

Pedestal sink $50pc for half baths

Sink faucets from China $54 PC

New bathroom vanities 48" for 2 center units $650 each

New bathroom vanities 60" double sinks for end units $900 each

New blinds for all windows verticals in living & dining, minis in bedrooms $500 from StarDecorating

Electric fireplace insert ($250) w/ ledge stone surround ($5.99/sqft) and mantle ($20) $500

New doors $42-$64 each

Kwikset handles & knobs $500 total for all units 

Modern kitchen cabinet handles $50 per unit

Tamper resistant modern outlets & switches-Leviton $200

New lights $370

LOTS OF PAINT!!!! About $600 per unit

Other miscellaneous expenses: drywall, 2x4s, trim, framed mirrors, caulking, sandpaper, screws, finish nails, various tools, etc.

Oh and fence panels & materials $1400 total for all units; we deducted a total of $750 from the first new tenants rent over a period of 3 months to install it.

Well that's my story, I would love to hear from others who have similar goals and experiences.  I would also like to network with anyone that has made the move to Nicaragua/Costa Rica.  Thank you for reading through my first post!