I will admit that as a real estate professional I should be bolder when it comes to using my insider advantage. However for most of my first 15 years in this business, I have worked with what I would call “lifestyle” clients. People who are moving for lifestyle reasons (new job, new marriage, new baby, new promotion, new town, etc.) In those cases we were either trying to be the best house or find the best house for the money. We were dealing with the prettiest homes in the best locations and most of the “work” was mental. If the real estate world had “white-collar” sales, those would have been them.
On the other side of the coin would be the “blue-collar” sales. Homes that required work. This is where the investors play. Where someone has to get their hands dirty and surprises are normal. These homes were NOT the “cream of the crop”… But, could generate some exciting cash flow. Well, I finally got fed up hearing about people buying these inexpensive properties and building up recurring rental income. So here is my story.
I contacted an investor group I know who is working full-time to get homes under contract at great discounts. The day I called, they had 3 homes under contract for me to consider. They emailed me the information and I set out to take a look. One home clearly stood out to me as my favorite so we explored that opportunity. Leave it to me to pick the house with more neighborhood than condition.
The kitchen had to be gutted, the copper plumbing had been stolen, one of the HVAC condensers had been stolen and it had some roof leaks. But I loved the lot, the size and the neighborhood for the price – $28,000! Ok, this I can do. Time for me to wire the money. Were you expecting that? With ALL those issues, all I had to do was work up a partnership agreement and wire money. In fact, 65 days and $37k later the house looks amazing and we have a tenant paying $1,150 per month.
Seriously, this was hands off – not hands on. ALL I did was wire money, take some photos, review a kitchen layout, make a few suggestions, talk on the phone a couple of times and live my life. My partners at Real Property Management Group, Inc. did the rest. Their crew was onsite the day after the closing and in 30 days the work was done. Items identified, designed, bought, completed and painted… in a month! Stain grade cabinetry, real tile floors, restoration style hardware throughout, pleasant decor… none of which I had to even think about. After that, their marketing staff immediately got the house advertised for lease and a tenant was secured in just over 30 days. I know that because I got a text message from RPMG – NOT because I interviewed tenants and negotiated the lease terms.
Here are a few more photos of how it turned out.