This whole house hunting experience has been interesting and kind of boring at the same time. Interesting, in that I'm learning new things about the real estate world (and myself) throughout this process, and boring because a good chunk of my time has been spent in the hurry up and wait stage.
I've compiled a list of properties I've looked at or considered during my search to find the perfect multi-family property. Some I discarded outright because of existing tenants, some because they didn't or couldn't meet the 1% rule, and others were discarded because of their condition.
I'll give you a refresher on my list of requirements:
-purchase price under $225,000
-at least 2 units
-preferred 2 bd with at least 2 toilets, but did look at a few that only had 1 bedroom
-non sketchy area of town
The pictures below are hastily drawn in Paint by yours truly. Not drawn to scale or structural integrity, but they give you just enough of a clue what they looked like.
House #1: $178,000
Expected rent: $1700
Thoughts: Really nice place with big yard and two full garages in a nice neighborhood. Both sides were empty, but they wanted too much money for the expected rent. Also needed some minor cosmetic upgrades.
House #2: “Hitler House” $135,000
Expected rent: $1500
Thoughts: Seriously, the house looked like Hitler with the overhang. Easily beats the 1% rule and looks great from far away. However, it's a flipper's nightmare. They slapped new paint and new carpet over everything, and ignored serious flaws. Walking over the floor in the lower unit made it feel like I was drunk because it was so uneven. It also featured a former porch that was converted into a bedroom, and I was concerned it was un permitted.
Taxes were only $1500 a year though.
House #3: $129,900
Thoughts: located in a slightly sketchy area of town. Meets the 1% rule. It has good visibility and the current landlord said it has incredibly low vacancy rates. However, there is standing water in the basement and the walls are anchored in place after the foundation shifted too much. I doubt I could get VA funding approval for it.
House #4: $179,000
Thoughts: Absolutely gorgeous Victorian house from 1880 in a historical district close to Downtown. It's got all the original woodwork in it, even though it's been divided into at least 3 units. However, an older house requires more upkeep and being in the historical district means even stricter repair options. It's also been on the market for over 2 years, which makes me worried that other people know something I don't about it. I'd be concerned that when it came time for me to resell it I'd have an equally difficult time. It does beat the 1% rule quite handily, though.
House #5: $184,900
Thoughts: Nice building in a nice area of town. However, it doesn't come anywhere near to hitting the 1% rule and no way the seller would come down enough to meet it. Also has some weird things, like the seller taking the fans and the tenants not wanting to move out. Taxes are also really high.
House #6: $155,000
Thoughts: It meets the 1% rule. Nice big duplex on a private dead-end road with a lot of updates. Someone got to it before I was quite ready to start looking, which I was kind of sad about.
House #7: $225,000
Thoughts: Meets the 1% rule. Both sides have 3 bd, 2.5 baths and a lot of updates. Located in a nice area of town close to lots of shopping (grocery stores, banks, restaurants, movie theater, library) right across the street from an elementary school.
So there's a small sampling of the houses I at least considered buying. Keep in mind the market is small to begin with, and not much is happening now in the tail end of winter. I shall continue to keep my eyes open for any opportunities that pop up!
Do you have any aspirations to buy a rental property? If so, how's your hunt going?
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