First post, but second house

[Benjamin Baellow]

I guess I should start from the beginning. I bought my first home with a VA loan and no money down. I lived there, but my intention was to have roommates that paid the mortgage. For two years I lived in that home with two roommates at a time. I rented two rooms from $550 to $600 a month each, and the mortgage on the home was just over $700. This was a 4bd 2bath with a finished basement, and I lived in the finished basement.

The plan was that the next property I bought would be a full investment property. However, sometimes life throws a curve at our plans. I started dating a lovely woman, got engaged, and realized I needed a home for us. That, along with paying for the wedding, set my plans back two years.

Late last year I found a small 700sq ft home in Waldo, which is a good area of KC. The home was bank owned. From the inside I could tell it had been recently flipped (new kitchen, bathroom, windows). The bank wanted $110k. I told my realtor to put in a bid for $93k, which they rejected. I thought I had lost the home, but a few weeks later the bank came back with a second offer. I asked my realtor how much they were asking for, and he said it was the same $110k. I told him to give them an offer of $96k half hoping they wouldn’t except, because that would drain all my savings for the down payment. To my surprise, they said yes immediately.

The home closed in October. I planned to have it rented in by November. I got a tenant approved, deposit was paid, and all looked good. The same evening I got the deposit the tenant ended up in the hospital and called to back out. I of course let her, but I had spent a good deal of time approving her and getting papers signed, so now I was already paying first month’s mortgage. At the same time, the tenants in my other rental gave me 30 days notice that they were leaving. Oh, and I found out that my wife was pregnant…with twins.

I quickly put up adds for both homes, and contacted my realtor who volunteered to advertise the rental to all his fellow agents free of cost. Long story short, I now have both homes rented. The first home still has a $700 mortgage, and I get $1400 a month in rent. The second has a $590 a month mortgage, and I get $950 a month rent (I could have got more around April or May, but I was stuck looking for a tenant in December).

Time to start saving for the next deal.