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Property #4 – Update SOLD…

March 12, 2011

This home was the conversion of my old primary to a rental.  This home is a 4-2-2 and over 2,200 square feet. I was not sure how this would work as a rental, but I was surprised at the responses after I put the sign in the yard.  I have some great tenants in there who have asked about purchasing the property a few times.

This home was built in 1976 and is in an area of the Dallas suburbs surrounded by all the major freeways in the area.  There is an exemplary Elementary school 2 blocks away, parks nearby, restaurants, etc.  There is no room to build new homes in the area.

This home barely cash flows, but the tenants are paying the mortgage and I will own it 6 years from now.   In the meantime, I will enjoy some of the big deductions on this property. Values have come down in the area since 2007, but I would say no more than 10%.   If we ever get home appreciation again, this one should really go up.

I lived in the home almost 3 years before converting it to a rental. I made several changes, but not the big updates that it needs.  When I bought the house it was Orange or Pink or something.  I changed this to a more neutral brown and once again paint has transformed a property.  In addition to painting the outside, I also tiled the bathroom floors, re-textured and painted the interior, and replaced the front door.  These few changes made a quite a difference, but the bathrooms and kitchen are still outdated.

I re-financed the home to a 15 year mortgage at 4.5% over a year ago.  I also took out a HELOC on this home and have been using this to purchase additional properties.    Below are the stats on this one:

Retail Value:  $150k in current condition, with updates $175k

How I bought it:  Conventional mortgage / liquid cash

Square footage:  2,200 sq ft

Rehab: $5k

Rent:  $1,200

Here are some before and after pics:

One Comment
  1. Thanks for sharing. Appreciation, tax write-off, and amortization make it a good buy-and-hold.

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