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:

Total Invested: $33,000
Current Loan Amount: $50,188
Payment (escrow included): $510.98
Loan type: 30 year fixed
Rent: $750
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.

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This is the second house I bought and I purchased it with a partner. I will call this house the Don’tPlex house. It was a duplex when we bought it and we converted it to a 4-bedroom single family house. It was the worst rehab experience I have had in my investing career.

This house is currently rented for $750 and the payment is 564.63 (with escrow). The problem with the house is that we spent almost $70,000 on the house and it is now worth about $50,000. The loan was for $57,000 but we used money from a loan on another house to compete this house so did not have to use our own money. Luckily, we have a 30 year fixed mortgage keeping the cash flow at a barely acceptable rate.

Here are the numbers:

Total Invested: $70,000
Current Loan Amount: $55,274.67
Payment (escrow included): $564.63
Loan type: 30 year fixed
Rent: $750
Monthly Cash flow: $185.37
Comments: We paid too much for this house and I wish I did not have it. This cash flow is tiny and I have a partner. It is probably worth about $40,000 and we could not sell it for the loan balance. Its cash flow is usually eaten up by minor repairs but we have never had to put money into it.

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