I am calling this the Historic House because if was built in 1897. It is a very nice large house with hardwood floors. This house has superb craftsmanship with fancy trim around the doors and windows. Unfortunately this house is in a bad neighborhood; some houses in the neighborhood are like this and others are complete dumps. The slang term from this neighborhood is ‘buckets of blood’, but there are $150,000 houses a couple of blocks away.
I purchased this house with a partner. We found it about the same time as the Don’t Plex house, just after completing the Wholesaler House. We bought this house for $27,000. It needed the outside portion of the A/C unit, some roof work, and we had a partial chain link fence completed. We ended up spending about $33,000 total on this house. It is currently rented for $750 but we are having trouble collecting the rent.
Here are the numbers:
|Current Loan Amount:||$50,188|
|Payment (escrow included):||$510.98|
|Loan type:||30 year fixed|
|Monthly Cash flow:||$239.02|
|Comments:||This is the most profitable house I have with my partner. However, we borrowed more than we needed and squandered that on another house.|
The tenant currently has the electircity shut off for non-payment and has told us she is moving next week. She has not paid December rent and only a portion of November. I would never have let her go this long if it were not for partner insisting. If she is there on Wednesday I will file for eviction.
We were able to borrow more on this house than we needed. We borrowed about $50,000 and should have had a lot of cash left over. Unfortunately, my partner spent almost all of this doing a perfect rehab on the Don’t Plex house.
We quickly got a tenant for this house for $600 per month. After about 3 months they got behind with rent. This went on for two months (due to my partner) and then the tenant agreed to pay $600, and the remainder the next week. He met my partner and handed him $600. I was on the phone and told him “don’t waste your money, if you don’t pay next week as agreed we will evict you”. He quickly snatched back his $600 and mumbled that his kids had to eat. I filled eviction right away and they left in about 2 weeks – just after being served.
This tenant stole our cheap incandescent light bulbs from the 14 foot ceilings. The house was also infested with roaches and felas. We were able to get rid of the roaches in about a month. However, the flea problem was very difficult to solve. It took several months and then fleas returned the next year; but that year the treatment got rid of them.
Our next tenant was on section 8 and the rent was $600. After two years we had the rent rasied to $650. She stayed one more year and then left because of the high electric bills. After she left, we found that the AC return duct had come loose and fallen under the house. This is the second time this happened and the first time was because her son was playing in the ducts.
After the section 8 tenant left the house was vacant about 3 months. We found a new tenant at $750 – who was the only person that applied in 3 months. Just after moving in she lost her job and we are about to evict her.
After this house my partner and I decided to no longer buy houses together. Our approach was different and there was really no need for the partnership. He was tried of the business and has not bought anymore houses. I think this is because he is so involved with the house maintenance work that he is not burned out on the business.