Cheap Single Family Rental - Del City, Oklahoma - Jon Pitcher

[Jon Pitcher]

I helped a friend/investor purchase a $50,000 single-family house to hold as a rental in Del City, Oklahoma (a suburb in SE Oklahoma City).  The sale closed on 5/12/2017.  This house needs a light rehab.  Major systems (roof, HVAC, foundation, plumbing) are in good shape, but the former owner was a smoker.  I used to run a house flipping business, so I have my old rehab crew lined up to help get this place ready to rent.

Here are the numbers:

3 bedroom, 1.5 bath, appr. 1,000 sq ft.  

1 car garage, plus carport

Purchase Price: $50,000

Rehab Budget: $6,000

Projected Rent: $850/month

I will manage the property for 8% of rent collected.  Tax and insurance will run around $150/month.  

My investor paid cash and is not planning to take a loan. I set up a single-member LLC for him to hold the property. In Oklahoma, a single-member LLC is sufficient to avoid personal liability, if you maintain the entity properly and can avoid activity (such as managing the property yourself) that will cause a direct lawsuit against you personally.

The rehab will include tearing out all of the carpet, putting tile in the entry, living room, hallway and bathrooms, plus carpet in the bedrooms.  We also need to replace a few doors and a couple of appliances, and fully re-paint all of the walls and ceilings.  Plus a few miscellaneous repairs.

The house was occupied prior to purchase, and we had a professional home inspection.  In addition, the City of Del City requires a city inspection and certificate of occupancy to be issued whenever a property changes ownership or changes residents.  So we required the seller to have the home inspected by the City and make any City-required repairs.

Rehab began over the weekend.  Carpet has been torn out.  Tile install and painting will begin this week.

Including some "before" pictures (I don't know how to rotate these):