Author Topic: Snagged a Free House  (Read 2811 times)

malacca

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Snagged a Free House
« on: August 03, 2020, 08:46:43 PM »
Summary:  *** I bought two twin homes as one unit. Rent from one side pays for mortgage and then some. ***

We had been overseas on and off up until November 2019. We had intended to move to a new house several times but are always traveling, busy, etc. so it never happened.

The house we were in was OK - but not that great. It was a large twin home with no HOA. I bought it for a song in 2012 and intended on staying in it for one year and then turning it into a rental. Anyway, we moved around here and there and rented it out as a furnished rental when we travelled. 8 years later...

So this year we were determined to find a better shack. We were looking for a 4/2 single family.

Then I saw this nicer twin home in a great location. But it was two large twin homes together under one tax ID. It has a huge lot and backs up to a nature preserve. Each side is 4/2 and 2500 SF. It was built in 87 and a decent shack and the lot is fantastic.

And here is the kicker. The lower level on each side is a separate mother-in-law like unit with separate entrances. So it is essentially a four plex. The units were not leased out like that but certainly could be.

The selling realtor was an idiot / difficult to deal with / scared away buyers. He made many critical errors in listing and representing the property. Well, most people would have just moved on - but I saw it as an opportunity (I love crappy RE agents! = $$$)

Both sides were rented out. One side had a just signed one year lease the the other side was month to month (rent was $700 below market). Ideally, the property should have been listed with one side vacant to maximize potential. Again, idiot realtor.

I went to view the house and met the renters. Of course I asked a million questions. Turns out I was the only person to view the place. When I heard this, I new I would be getting a bargain. The renters on both sides told me everything that was actually wrong with it. So I used all of this to beat the price down A LOT. I am not shy about making low offers.

So I cast out my lure. Bam, I got a strike. I set the hook! It is easy when you are the only lure in the water.

So we moved into one side. The renters on the other side are fine but we are not renewing the lease as we want to turn that side into two furnished units (I do corporate housing).

I did put 25% down. But it doesn't cost us a dime to live there. And once it is rented as two corporate housing units it will be way above paying for just the mortgage.

The building is quite long so we are not jammed next to the renters (like some twin homes). So we are fine with it.

We are in one of the best school districts in the US - so long term I feel the value will hold up fairly well. In fact, an award winning elementary school is one block away.

I paid 100K under market. I figure on holding it for ten years until the youngest graduates high school and we leave the area for a warmer place. We may move out after one year (must be owner occupied for one year for mortgage) as our side would produce great income as two more units. But we will see how this pandemic plays out.

For me money is not an issue. But nothing beats free.

Up until this property I had never had a mortgage in the USA. But with rates so dang low I thought I should lock in some cheap money. Of course that was pre pandemic - so I need to refinance. I will do a 15 year at around 2% - the new low.

Back story: The previous owner built it himself. He made the MIL units as he had his mother or other in laws / friends staying there over the years. He also had multiple rental properties. He got old and moved to an assisted living and passed away. The children decided to sell the property. They hired the same realtor their father had used (the idiot). Poof, they lost 100K.






Dicey

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Re: Snagged a Free House
« Reply #1 on: August 03, 2020, 09:01:58 PM »
Wow.

Metalcat

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Re: Snagged a Free House
« Reply #2 on: August 04, 2020, 05:46:39 AM »
Yeah, wow, well done.

Dancin'Dog

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Re: Snagged a Free House
« Reply #3 on: August 04, 2020, 07:57:07 AM »
Congrats.  Sounds like a great deal.


We basically picked up a free house last year too.  We had tear down on the HCOL side of the lake and swapped it for a 5br/7ba 5500sf house of the LCOL side of the same lake, for approximately the same price.  Property taxes here are the same for the nice home as they were for the double-wide in the other county.  We're 15 minutes further from downtown Charlotte, but rarely drive there anyway.  Our electric bill is a lot higher now & we also have an HOA fee, but I'm still calling it a "free house".  This side of the lake is beginning to see a lot more development, so I expect property values will increase quite a bit as the roads get widened & more restaurants are opened.  A new brewery just opened a few miles South & a new Publix grocery & retail development to the East, so it's already happening.  It's been sort of strange moving from the cheapest home on the street to the most expensive home on the street, in a nice way. 


I admit that it's way more house than we need, but after shopping the entire lake & viewing all the homes in our price range it was the best value, and offered most of the things we wanted.  It has a nice view, a large private lot, master on the main, terrazzo in the common areas, lots of outdoor living spaces, etc.  We never planned to live in a McMansion, but they're not so bad if you manage to find a free one. ;)




marty998

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Re: Snagged a Free House
« Reply #4 on: August 29, 2020, 08:05:50 PM »
Love this story, congrats OP. Out of town agents are the best to deal with as a buyer - they simply do not know the area or the properties well enough.


We basically picked up a free house last year too.  We had tear down on the HCOL side of the lake and swapped it for a 5br/7ba 5500sf house of the LCOL side of the same lake, for approximately the same price. 

I have problems motivating myself to clean 1 WC. I would die inside having to scrub and maintain 7!

Dancin'Dog

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Re: Snagged a Free House
« Reply #5 on: August 29, 2020, 09:19:31 PM »
Love this story, congrats OP. Out of town agents are the best to deal with as a buyer - they simply do not know the area or the properties well enough.


We basically picked up a free house last year too.  We had tear down on the HCOL side of the lake and swapped it for a 5br/7ba 5500sf house of the LCOL side of the same lake, for approximately the same price. 

I have problems motivating myself to clean 1 WC. I would die inside having to scrub and maintain 7!


I'm only allowed to use 2 of them. ;) 


 

Wow, a phone plan for fifteen bucks!