year 2, property 2, unit 5

[DJ Cummins]

Hello friends! So i thought i had a deal about 3 months ago, and it fell through after the inspection. I decided to wait on posting until we actually got this SFH closed. The property is a 2 bed, 1 bath in Bethalto, Illinois. We closed with a sales price of $43k. The appraised value was $44k, but if we were to put around 10k into this property, I would imagine it would appraise it the mid 70's. Very happy with the purchase!

The numbers:(20 year mortgage)

Rent: $725

PITIA: $295

25%(vacancy and expenses/cap ex): 182

Cash Flow: $248 per month.

The kicker with this property, is that the owner of the property's daughter(a senior citizen-who has lived in the property for two years) needs to live in the property for approximately 6 months until her house renovation is completed(by her son, which is taking longer than expected).  We actually are acquaintances from church, so that was kind of nice having a bit of a relationship with her, since this was a unique situation.  

At closing, we were given the keys, which we gave right back to her, and she signed a lease and has paid her full rent and deposit.  What a good feeling to close, and collect rent and deposit all on the same day.  Wish they all could go this smooth, but i doubt that is going to happen!

My wife and I are still new at this, but in about 1.5 years, we have 5 units, and a gross income of $2,625.00(small potatoes for a lot of investors, but I am proud).  We have bought both properties with 20% down, 20 year commercial mortgages, from a portfolio lender.  We are planning on buying 2 more properties next year, hopefully by the end of the summer.  We have a fairly large amount of equity in our 4 unit, as we have rehabbed the 3 of the 4 units, but are saving that equity for a big purchase some day.  We plan to keep saving our pennies, and growing a bit slower for the next few years.  Hopefully 4-5 years from now, that equity will be traded in for a much larger property!

I don't know if any information in this post could actually help someone or not...but if nothing else, hopefully it provides a bit of motivation.  It seemed like it took forever to buy our second property, but now that it is closed, we are planning on buying 2 more in the next six months!  Stick with it my newbie friends... a little hard work, determination, and penny pinching can really make this happen!

DJ