My wife and I recently retired to Cookeville, Tennessee from Las Vegas, Nevada. We are in our late forties and decided to leave the “rat race” after twenty some years of working.
We were fortunate enough to beat the housing bubble burst and got out of Nevada with a nice chunk of change, which we planned to invest in real estate in Tennessee.
The first “flip” property we bought was a 1959, 1800 sf, 3-bedroom, 2-bath, brick house on a half acre in a nice area. It was a VA repo, and we got it for $59,500. The problem with the house was it was a complete disaster.
It needed a complete gut and rehab. This we did lovingly for about five months, (It darn near became like a daily job!) and in the end we had a beautifully renovated property. We did all the work ourselves as we are retired and have the skills, but as I said it became like going to work.
After all the work was done, we listed with the agent who found it in the first place. We had, more or less, said she could list it when we were done. That was a mistake.
After a month of no bites and one poorly done open house, (She didn’t seem to have the time on the other weekends for more open houses.) I ended up making a deal with the neighbor next door who had watched me rehab the house for the last five months. She wanted to buy it for her niece and fiance who were just starting out, had seen the house and loved it, but couldn’t afford to buy it.
I was able to discount the price about $13,000 (Again, I had used Realtor advice to set it too high in the first place.) to $125,000 and negotiated a cash down of $30,000 and took back a note of the remaining $95,000 at 8% for 15 years or about $907 a month.
Well, we had to pay the 6% Realtor fee, but with all the interest we are making from the note we have most of that back.
Couple of lessons here: Do your own comps and never use a Realtor to sell. Buy and sell “for sale by owner” if you can. We did this with our Las Vegas home, and it was so easy.
We just bought our second flip property here. A 10-year double-wide mobile home on about an acre, bank foreclosure, for about $43,000. All it needs is elbow grease and about $7,000 in parts, and we should be able to flip it for a modest $85,000 to $90,000. Who said real estate investing is hard work? It is the only way to go!