Common sense perspectives and finding a way to retire

My Real Estate venture this year

Posted by Paul on November 24, 2006

This past spring we found a nice brick cape in the growing suburb of Lancaster. The owner had gone into a nursing home and the kids were trying to sell the house. It had sat on the market for 6 months primarily (I think) due to lots of water in the basement. The asking prices was the assessed value ($105K) and had just been reduced to $98K. We offered $75K with seller paying $3K in closing costs. We ended up at $80.5K with $1500 closing paid by seller. We took out a HELOC on our house to pay for the 20% down required for investment property and the repairs. We closed in May and in 6 weeks we had repainted inside and out, had BathFitters put in a new tub and shower enclosure (too expensive!) and had drain tile put in the basement. We spent about $17K. In order to get some money coming in fast we advertised it as a “rent to own”. We had a simple RTO sign in the front yard and that sign pulled in over 500 calls. A newspaper ad and an ebay listing pulled in 2 leads. One nice couple who had gone through bankruptcy signed the agreement. Part of our lease is that they pay for the first $200 of repairs. They also paid us $2500 in option money.

So far they have been perfect tenants – already spending money on the house like it is theirs. Rents are paid on time. This is our inspiration to expand this concept and why I think it is the best route right now to accumulate money for college and retirement.


One Response to “My Real Estate venture this year”

  1. […] The large changes in debt this year was due to the purchase of a rental property which I discussed here. You can see that I am cash poor but have some paper worth. Probably not as much as a person my age should have. My immediate problem is 4 teenagers who want to go to college. Only one may be scholarship material so, you can see why I am motivated to do something besides my job. […]

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