All Forum Posts by: Chris Palmer

We had put in a cash offer on a house in Gainesville, TX. The listing price was $99k, we offered $95k. The bright side of the property was there was two potential rental income sources. There was a main house built in 1920 which was a 2 bd 1 bath 1400 sq ft home. Comps in the area were very favorable, but the house was in very poor condition. Thanks to some good advice we got of the forum we estimated that improvement costs would have been around $50k on the main house and around $21k on the smaller cottage. Rental comps were in the neighborhood of $700 and $400 for a total of $1100 / month. When we ran the spreadsheet numbers we weren’t getting but 3% return on the cash put into the house.
That of course was if it stayed rented.

My question was did we make the right call? What would have been a price point in the property which would make sense? Is there a calculator for that?

Daniel, I'm not sure, what would you recommend? Their rent is way below market, and I don't know if I could make improvements with their current state of occupation. However, built in income is something to consider. Regards, Chris

Thanks James! Really good stuff, that's exactly what I was looking for.

My wife and I just made an offer on our first investment property and we have a few questions regarding our potential investment.

First some background on the property, this property hit the market just a few days ago, the owner has held the property for a long period of time, over 25 years. The property has two units a 2 bed 1 bath main house @ around 1400 sq ft which was built in the 1920s, and a 600 sq ft cottage with 1 bed and 1 bath.

The cottage is currently vacant and needs some work. The main house is rented but has been rented by the same tenants for over 20 years. In that time little to no repairs have been made to the main house. When we looked at the main house there was little doubt that there would need to be significant changes made to make it rentable for new tenants.

The property was listed for just under $100k, and the neighboring properties all come in well over $150k. It is also one the edge of a historical district and has lots of very nice homes in and around the area.

We made an all cash offer for just under the asking price, as we wait to see if our offer is accepted we did have some questions.

1. Rental comps in the area go for $800 and $600 respectively, how much of an improvement investment should we make into these properties to make them rentable?
2. While I’m working on the improvements, how can I protect our investment from theft of appliances or materials?
3. Since there are some obvious repairs needed, once the inspection is complete, what sort of repairs or cost would drive this into something we should walk away from?

Thanks in advance for your help!

Regards,

Chris

Looking for some advice on our first investment property. First, some background, We live in the North Texas area, and we found a multi-tenant property which hit listings a few days ago. This property definitely qualifies as the cheapest property on the block. All of the neighbors come in around $50k higher than what this property was listed for. The house was built in 1920 and has some renters which have been there 25 years. Sufficed to say there haven't been any improvements to the main house on the property in that time. The main property is a 2 bed 1 bath. The other house is a 1 bed 1 bath cottage which has been vacant for some time. Some more details. Property was listed for just under $100k, after doing some digging it looks as though the owner has held the property for some time and is now looking to move away from the property due to health reasons. We made an all cash offer for just under asking price. So some questions: 1) Looking at rental comps in the area, We estimate getting $800 and $600 for the properties if they appropriately fixed up. How much money should I invest into repairs and improvements for this amount of rental income? 2) What are the best ways to secure our investment while we are making improvements? I'm worried about theft of appliances and materials while vacant. 3) I imagine that the inspection will turn up some problems. At what point do the issues outweigh us making the investment and walking away from the property? Thanks in advance for your help! Regards, Chris