My out of state experience sharing (DFW)

[Henry J.]

We just sold one of our Dallas properties after holding it for 4.5 years.  The last 2 years had been painful - with on going repairs, horrible tenant with late payments and pets that pee'd on the carpet...  After the last tenant moved out we had to spend more money for the repair and make ready.  We were lucky that our held 2 months of rent as deposit to help pay for some of these repair expenses.

So here are the past 4.5 years financial for those who's looking into OOS investment.  I'm not an accountant so please don't scrutinize the buckets.  I didn't include the travel / visit cost since we have multiple properties there, but the these are actual expense amount for this property. 

This was sold through our PM from another investor.  The PM has managed this property for a year prior to us buying it.

Property location - Burleson, TX

Floor size - 2,300 sqft

Lot size - 7,400 sqft

Year built - 2003

3 bed rooms / 2 baths / 2 stories with 2 car garage.  

Purchased Price - $125K

Down payment - 25% / $31.25K

Purchase related expense - $5.3K

Sales Price - $189K

Sales expenses (including concession / commissions / etc) - $17.5K

I think we made $34K after (before tax) after 3 years worth of losses. The IRR is around 11%.

Lessons that we learned over these few years from this house -

1. Have reserves.  You can't control the weather so be prepared when there is wind / hail / water damages.  Heck - we even got a broken pipe while the house was on the market.  Luckily it's outside at the front yard.

2. Tenant quality is important.  There are families out there who don't take care of their children and pets.

3. Timing is important - if there is no appreciation we would not have got out of this house with any gain.

4. We need scale to even out the odds.  We would have had a harder time if we didn't have 3 other properties easing the pain to pay for AC / fences / repairs.

I wish we sold the house last year instead of renewing the lease with this last family.  The repair $ should have been much less but not sure if the timing would have worked for us due to Fall lease renewal.

Thanks.

Henry

[Grant Shipman]

Thanks for writing everyone- I'm new, so I appreciate the discourse having just moved to Denver after living in TX for the last 10yrs