Backstory: my cousin, her husband and I have a very tiny real estate empire in an LLC. To date we co-own a duplex that we purchased during the meltdown in 2010. We rehabbed it and it cashflows well, each receiving about $600 per month. In more recent years we've flipped a manufactured home on country property and foreclosed condo. We work well together have an annual meeting to discuss if our arrangement still works; it always does. Each of us owns separate property that we rent, them their first house and me a small commercial property I rent to my business. We have considered, looked at, and discarded the idea of buying a 4 or 5 plex. We've looked at several and decided it's not for us.
Recently an off market property opportunity came our way. It's a 3/1 SFR on a half acre. The sellers, son and daughter inheritors, want a quick cash deal and listed it for $78,000. We countered back and forth a few times and ended up with a final sale price of $72,500. The sellers need to move out/dispose of many, many things. It's in no way a hoard, but older people lived there for a long time and there's lots. of. stuff. The overall systems of this house are in solid condition.
The financials of this deal are putting in $40,000 from the LLC, cash from our previous flips that we have been holding back. And then each party of the LLC (I am half) putting in approximately $20,000 to fund the rest of the purchase price and the projected repairs. We are planning on working on this property through the summer, painting indoors and out, re-grouting tile, refinishing floors, and basic landscape upgrades. My teenage son will be working part time, along with the other partners. Already we have a potential tenant pool of incoming teachers to the town. We are estimating the rent to be between $1000 - $1100 per month.
We're moving forward and thinking this is almost a no brainer. And yet, the town where this house is located is just under 20 miles away. Envisioning many, many back and forth trips, visits to the Home Depot that's midway. It's going to be some work We will be self managing this project from rehab to rental.