Picking a House to Invest in

[Mark Ostertag]

BP,

I’ve been reading and researching a ton (for years) and the finances are finally in place to pull the trigger. Now I’m having difficulty picking which house - please provide your experienced thoughts!

Do the little items I mentioned make a big difference or will they all rent to somebody so don’t worry about it? I want to ensure quality long term tenants, low vacancy, and higher rents (hopefully leading to better quality tenants).

All houses 3bd,1ba. In the same village. And all askings seem high to me ha (maybe I’m optimistic!)

First house

Asking $115k

1000 sq ft. Good neighborhood, outside is simple but good, No garage, paved driveway, small yard front and back. Next to a 6 unit with doors that open next to the driveway, not preferred but whatever. Inside and rooms look great, Pinterest finishes, granite countertops, looks impressive. Basement is clean, if musty, good for storage easy access. Loved it up to this point.

Concern: bathroom is epic small. Toilet is so close to the tub that overweight or tall folks would have issues with it. The sink isn’t far from the shower wall either. Those who have seen and I don’t know of any good way to rearrange this unless we skip the tub and install a shower, but then I lose families with kids as potentials.

Deal breaker?

Second house

Asking $110k

1232 sq ft. Right next to the dumpy street in the village, but the whole village is fine. Surrounded by commercial on three sides. Short walk to village library, post office, great restaurants, etc. driveway is gravel and has grass growing in the middle. Rusty shed in the small fenced in backyard. First floor laundry, mud room, outdated kitchen without dish washer or spot for microwave (maybe fixable). Carpets throughout living areas. Bathroom is spacious and tiled, old windows throughout the house, molding etc all speaks of lower quality home. Basement and attic both have super steep stairs and I would recommend anyone use them.

Concern: I can’t decide if being near commercial area is good or bad and I’m concerned that the dumpy area nearby will attract similar renters? No dishwasher and microwave sound like a negative for renters (maybe I can add them).

Third house

Asking $130k

1512 sq ft. A church friend owns this and it isn’t on the market. They are savvy though and are asking a bit high. It is currently occupied and cashflowing. I don’t know anymore than what they’ve told me because they don’t want to disturb the tenant. Pictures from when they rented it make it look somewhere in between the first two houses in quality, but it is more sq ft. Owner will replace the roof prior to selling. I’m trying to carefully discuss and negotiate with them as I’m learning and see an opportunity here.

Concern: I haven’t seen much here of the house and so I don’t feel I can make a good offer without knowing the condition beyond their word of mouth? While immediate cash flow is a plus, I’m not sure how to ask the appropriate questions of the seller to vet the tenant they vetted. Seems easy to be rude? The last thing I want to do is take over the house and then have to evict them...

(P.S. if you’ve read this far, sorry for the long post! Just trying to explain the variables.)