All Forum Posts by: Tracy Thompson

So after reading "Rental Property Investing" five times and reading "Managing Rental Properties" twice, we have purchased two homes at auctions and are getting them rent ready.  We are also currently working on writing our first lease agreement, our question is if we include all of the tenant's children/relatives etc... age 18 and older that will be living in the home on the lease and if the mother or father leaves, moves out, etc... will all of the remaining adults on the lease be fully and legally responsible to fulfill the remaining months on the lease?  We are located in Ohio.  Thank you.

David, sorry for the delayed response, we just got home from three auctions. This home that I mentioned above (which the auctioneer assured us would not sell for anything over $73,000) shocked everyone and sold for $100,00! Emotions got the best of two people that were dead-set on winning! The roof was good and had about 10 years left. We had planned $1,000 annually for maintenance and repairs. We did however end up purchasing two SFH at the other auctions that should meet or exceed everything that we have learned, so far, from Brandon's Book on Rental Properties and cannot wait to put them to work for us! Thank you, Tracy.

We are brand new to all of this and are hoping for some more advice and feedback. We located a two bedroom, one bathroom 832 square foot ranch SFH with a full unfinished basement and large one car garage in a very nice neighborhood on a large corner lot. The purchase price would be $73,000, the current rent is $850, insurance is $900 annually and taxes are $1300 annually. Similar homes are selling from $85,000 and up. After some rough calculations and assuming that we refinance at 4.7% and hold onto it for thirty years as well as plan on a five percent vacancy rate, it looks like the monthly cash flow would start at approximately $220 with well over a 12% plus average return over a full 30 year period. If we purchase this home, the next time that it is vacant, we would plan on investing about $3,000 - $4,000 for new carpet, paint, etc... Are we overlooking anything or should we pass on another one? Thank you, Tracy and Amy.

Thanks Brent.  Update- with the holiday, the realtor is continuing to try to get the keys from the property manager.  IF this works out, we have no plans to use a property manager as the home is close to us and I am very handy with normal/ongoing repairs. We also learned that the rent has not been adjusted in years, the tenant has been month to month for years and the location and neighborhood will easily allow a sizeable monthly increase. If this does not work out, there are two SFH auctions close to us this Friday.

Thank you everyone for your quick responses as well as the valuable information.  We meet with the realtor this afternoon and if we cannot negotiate a better price as well as immediately increasing the rent, we will pass and continue looking.  Tracy.

After reading The Book on Rental Property Investing three times and searching daily for five months, we believe that we are close to closing on our first single family home that is 700 square feet and in very good condition in a good neighborhood.  If everything works out, the purchase price is $35,000, the current long term tenant pays $450 monthly, insurance is $700 annually and taxes are $800 annually.  We are still not clear on what the minimum returns should be on a nice single family deal.  Does Brandon recommend a 12% per year or an average of 12% over a full 30 year period?  Additionally, does he also recommend an immediate minimum $200 cash flow per month on a single family home?  Finally, we could pay cash and not need to finance anything.  Thank you, Tracy.