Diary of a $3,900 house ... wait, what? $3,900, yes that's right!

[Dawn Anastasi]

Okay, so this one is a little out there even for me!

What on earth could I possibly be talking about?  $3,900 for a real house, not a Barbie doll house right?  Where am I -- Detroit???  (See what I did there Josh, you know you were thinking it.)

No actually this is a 1-bedroom, 1-bathroom single family house in my primary zip code.  It's a tax foreclosure, and it took a while to get in there because there was someone living there. They of course left a mess, but luckily it wasn't as bad of a mess as you'd think a $3,900 house would have.

Now, normally I'd never buy a 1-bedroom house and I think it being a 1-bedroom house may have deterred other investors away from it.  But my goal is to turn this 1-bedroom house into a 3-bedroom house!  

And just to be more ambitious, this is the list of everything I want to do:

- Clean all the junk and debris from the house and yard and demo the shed in back

- Replace the roof and fix the gutters/soffits

- Landscaping

- Replace all the windows with double-pane vinyl windows

- Replace all the floors in the house (ceramic tile for the kitchen/bath/laundry room, and vinyl plank for the living room and the upper level)

- Re-do the bathroom with new everything -- plumbing, tub, shower surround, floor, sink/faucet, toilet, mirror, accessories

- Re-do the kitchen with new cabinets, counter tops, and sink/faucet

- Paint the entire interior (white ceilings, beige for walls, white for trim)

- Replace all the light fixtures, outlets, and switches

- Replace the front and back doors and put in new locks

- Add smoke detectors and carbon monoxide detectors as required

- Finish off the upper level (that was begun by someone else)

I want my rehab budget to stay at or under $30,000 and I want to complete everything within 2 months from closing.  I would ideally like to rent this property out for at least $825/month.

I didn't do the best job on my last "deal diary" in terms of keeping it up to date, so I'm hoping I can stay on track with this one.

Step 1 - Make offer. Submitted today.

Step 2 - Get accepted offer. This also happened today!

Stay tuned for more as this story unravels!

[Richelle T.]

@Dawn Anastasi

Congratulations!!! My most recent rental was also a tax foreclosure that I bought for $7,500. It's a 3/1 that we're all in for $32,000 and it rents for $825. Best.Deal.Ever.

Good luck, it will be a TON of work but you can do it! One thing that I would do differently is start with curb appeal and advertise before the property is ready. It's not advise that I thought would be applicable to a rental, but it is. Here's why: People in the neighborhood thought the house was still vacant and were surprised to see it as active again. That is your prospective tenant base! You need time for the perception to update. You know how when you're used to seeing something as dilapidated, you see it that way even if it's pretty now.  Hope that's a helpful tidbit! Congrats again :-)