All Forum Posts by: John Wigglesworth

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $120,000
Cash invested: $36,000

Single family 3/1 rental. Purchased off of MLS on second day of posting. Numerous offers followed that I suspect were higher after mine was accepted. The roof needed work so the seller agreed to file a claim as I offered to cover any deductible. This saved me $2400 on the new roof. Seller also agreed to complete a new survey. Other than that, I offered the asking price with a quick close. Rents for $1275 for over 8% cash ROI. About $300 a month cashflow.

Investment Info:

Single-family residence buy & hold investment in San Antonio.

Purchase price: $71,000
Cash invested: $45,000
Sale price: $1,200

Bought with renters paying $950! A landlord who wants to offload tenants probably has a good reason. These tenants missed rent and trashed the place. They left the house flea infested and destroyed the AC. Didn't renew their lease. We put another $45K in the property (including central AC) and stuck with our business model of high quality finishes to get high quality tenants. We raised the rent to $1200 and had a lease signed halfway through the renovation with a very good tenant.

What made you interested in investing in this type of deal?

Price and location

How did you find this deal and how did you negotiate it?

Wholesaler. Bought at asking price.

How did you finance this deal?

Cash. Refinanced 6 months later.

How did you add value to the deal?

New roof, HVAC, flooring, paint walls and ceiling, painted exterior, painted kitchen cabinets and added new hardware, replaced hardware, new light fixtures, new doors, granted countertops, subway backsplash, put sod over muddy yard, partial fence, updated breaker box, new appliances.

What was the outcome?

After we got rid of original tenants placed by previous owner, this was a great deal. Increased rents from $950 to $1200.

Lessons learned? Challenges?

Don't get too friendly with contractors. Our contractor became a little to comfortable and really slacked on the work. Had we not become friends and maintained a client/contractor relationship only this might have gone better. Our friendship remains, but I ended up firing him and finishing the last few days work desperately on my own with some help I called in at a daily rate. The house wasn't ready and a new tenant had signed a lease, so I had to refund 8 days of rent due to the delay.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I use a general contractor / handyman named Robert Chavez to save me when this project started going sideways. Everything he does is good, but he stays booked as a result. He has done excellent work hanging doors, sheetrock, painting, putting up cabinets, backsplashes, installing P-traps and garbage disposals, etc. His prices are very reasonable. I can share his information if someone reaches out and I let him know.

Investment Info:

Single-family residence buy & hold investment in San Antonio.

Purchase price: $71,000
Cash invested: $45,000
Sale price: $1,200

Got this from a wholesaler and it already rented for $950. We put $20K into the house with a new roof and more as the previous owner neglected the property. Still a good return better than 1%. However, a landlord who wants to offload tenants probably has a good reason. These tenants missed rent a lot and trashed the place. Instead of suing for eviction during COVID restrictions, we just didn't renew the lease. After we replaced the countertop and part of the cabinets from water damage for these tenants soon after our purchase, a year later we were replacing he same countertop and cabinets with more damage from the tenants. They left the house infested with fleas, destroyed a one year old window AC, and left trash everywhere. We put another $25K in the property (including central AC) and stuck with our business model of high quality finishes to get high quality tenants. We raised the rent to $1200 and had a lease signed halfway through the renovation with a very good tenant.

What made you interested in investing in this type of deal?

Price and location

How did you find this deal and how did you negotiate it?

Wholesaler. Bought at asking price.

How did you finance this deal?

Cash. Refinanced 6 months later.

How did you add value to the deal?

New roof, HVAC, flooring, paint walls and ceiling, painted exterior, painted kitchen cabinets and added new hardware, replaced hardware, new light fixtures, new doors, granted countertops, subway backsplash, put sod over muddy yard, partial fence, updated breaker box, new appliances.

What was the outcome?

After we got rid of original tenants placed by previous owner, this was a great deal. Increased rents from $950 to $1200.

Lessons learned? Challenges?

Don't get too friendly with contractors. Our contractor became a little to comfortable and really slacked on the work. Had we not become friends and maintained a client/contractor relationship only this might have gone better. Our friendship remains, but I ended up firing him and finishing the last few days work desperately on my own with some help I called in at a daily rate. The house wasn't ready and a new tenant had signed a lease, so I had to refund 8 days of rent due to the delay.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I use a general contractor / handyman named Robert Chavez to save me when this project started going sideways. Everything he does is good, but he stays booked as a result. He has done excellent work hanging doors, sheetrock, painting, putting up cabinets, backsplashes, installing P-traps and garbage disposals, etc. His prices are very reasonable. I can share his information if someone reaches out and I let him know.

First, you have to hire a lawyer to draw up the wrap mortgage.  I basically took over the owner's mortgage with $4K out of pocket.  The mortgage stays in his name, but I make payments.  Everything comes to my address, even the 1098, but it's in the first mortgage holder's name.  As the payer, I get to claim everything for taxes.  If I don't make a payment, the first buyer can foreclose and take back the house will all the improvements I've made.  If the bank finds out and wants to, they can call the loan based upon the "due on sale" clause in the mortgage.  Banks have no interest in doing that if I'm making the payments.  It's a little bit more work when you refinance and get it in your name, if you go that route, but it's a good way to bail someone out facing foreclosure and to get a property for little to nothing.  This house still needed a lot of rehab, so the $4K only got me the property, but it wasn't rent ready.  I'm in the property all for $140K, it rents for $1465, and it appraised for $170K when I refinanced.   All said and done, I've got about $20K of my own money in the house. The end numbers aren't as sexy as the $4k out of pocket to purchase, but it's still a good deal.  Don't get fooled by the sexy stuff, good is good, the great stories are all you hear on the podcasts and commercials.  

Northeast 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $85,000
Cash invested: $51,000

Bought this HUD home with an aggressive bid. Many repairs and replacements were unexpected, e.g., water heater, HVAC, and plumbing. Rented for $1275, high for the neighborhood. We got excellent tenants. They moved out and the home was rented the next day to more excellent tenants for $1295. It's the nicest house on the street, which is not our goal, but a standard we often meet. We didn't meet the 1% rule as planned but that's okay. It's the long game.

What made you interested in investing in this type of deal?

Lower priced property with room for improvement as a long term rental.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

BRRR. Cash then refinanced later.

How did you add value to the deal?

New roof, water heater, flooring, kitchen cabinets, new lighting and ceiling fans, paint inside and out, and the little details that make things look new (like replacing all old dingy outlets, light switches, and door hinges).

What was the outcome?

Went over budget. Rented easily. Stays rented.

Lessons learned? Challenges?

Budget more for the unexpected. Never rely on a working water heater or older HVAC... assume they need updated for your budget.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes. I worked with Natalie Kavulic.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $86,000
Cash invested: $14,000

My first investment and a good low risk start. 2/1/1 purchased from online auction.

What made you interested in investing in this type of deal?

I was able to go look at it with a realtor before the auction. I had a good idea of what I was getting.

How did you find this deal and how did you negotiate it?

I found it on Xome.com. It was an online auction. The downside is the bank can bid as well, and their bids are just to drive you up. I won the bid and then they said I didn't meet the reserve price. I had to negotiate a little thereafter. I came up a little, but not what the bank originally wanted. Never just lay down on their first offer.

How did you finance this deal?

Cash, then refinance.

How did you add value to the deal?

Paint throughout. Updated the appliances and fixtures. High quality brand new carpet for 2 bedrooms for $100 from a brand new build off Craigslist. Cement back patio. Replaced the back of the fence. The yard was just dirt so I put in sod and a lot of mulch. Mulch is cheaper and looks nice. Tenants aren't going to take care of nice grass, but this sod gave me what I wanted... a lot of attention with the photos.

What was the outcome?

I had about 30 visits to the house (another thing I won't do anymore). Rented in about 4 weeks.

Lessons learned? Challenges?

Read "Managing Rental Properties" by Heather and Brandon Turner. I made a number of mistakes screening, or not screening the tenant. I didn't know how to show the property and manage my time. I rented to a Section 8 tenant because she was very sympathetic, seemed real nice, and was convincing. She parked her car in the yard killing the lawn and has since snuck several animals into the house and continually lied about it. Rather than evict, we did an lease amendment and a $500 pet deposit.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jose Zuniga with Texas Prestige Property Solutions.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $86,000
Cash invested: $14,000

My first investment and a good low risk start. 2/1/1 purchased from online auction. The rehab was all cosmetic but there was a lot of cleanup. Did a lot of the work myself and learned the value of paying someone else. I didn't lose any money busting up the driveway with a rented jackhammer, but I lost a lot of time and my contractor could have done it much much quicker. I rented to a Section 8 tenant, got a little extra in rent, and 90% of the rent is automatically deposited on the 1st each month. The tenant will be there a long time. However, I probably won't do Section 8 again.

What made you interested in investing in this type of deal?

I was able to go look at it with a realtor before the auction. I had a good idea of what I was getting.

How did you find this deal and how did you negotiate it?

I found it on Xome.com. It was an online auction. The downside is the bank can bid as well, and their bids are just to drive you up. I won the bid and then they said I didn't meet the reserve price. I had to negotiate a little thereafter. I came up a little, but not what the bank originally wanted. Never just lay down on their first offer.

How did you finance this deal?

Cash, then refinance.

How did you add value to the deal?

Paint throughout. Updated the appliances and fixtures. High quality brand new carpet for 2 bedrooms for $100 from a brand new build off Craigslist. Cement back patio. Replaced the back of the fence. The yard was just dirt so I put in sod and a lot of mulch. Mulch is cheaper and looks nice. Tenants aren't going to take care of nice grass, but this sod gave me what I wanted... a lot of attention with the photos.

What was the outcome?

I had about 30 visits to the house (another thing I won't do anymore). Rented in about 4 weeks.

Lessons learned? Challenges?

Read "Managing Rental Properties" by Heather and Brandon Turner. I made a number of mistakes screening, or not screening the tenant. I didn't know how to show the property and manage my time. I rented to a Section 8 tenant because she was very sympathetic, seemed real nice, and was convincing. She parked her car in the yard killing the lawn and has since snuck several animals into the house and continually lied about it. Rather than evict, we did an lease amendment and a $500 pet deposit.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jose Zuniga with Texas Prestige Property Solutions.

Andrew, 

I didn't market the property beyond putting a sign in the yard. I often put properties on places like trulia, zillow, and craigslist.  However, it was my contractor who put out a for rent sign early in the yard (before renovations were compete).  I probably had 7-8 inquiries just with the yard sign.  In two of my rentals, the simple yard sign resulted in a tenant.

I don't use a PM.  I just have 5 rentals so I'll grow and learn a little more before handing over the management.  

I'm in the military myself, and can tell you a large percentage of military don't want to live near base.  Its' great for AirBnB due to the constant graduations.  None of my 4 rentals near Lackland are rented by military.  I think 78227 off Loop 410 is a great area to invest, nevertheless.  

John

  

The cash flow is about $300 with $200 more going to savings. I say "about" because I'm waiting on the appraisal for a refinance which will affect the numbers more or less. The low interest rates have helped increase the ROI on properties already owned. I heard an investor on a podcast pitch a $500 rule without looking at percentages. $500 above the mortgage, taxes, and insurance should always get some good cashflow and cover expenses. I managed that here, but actually hadn't heard of that rule until recently.