It's been a while since I have updated you on my real estate ventures. But never fear -- my silence doesn't mean there hasn't been a lot going on, because there has. Here's a quick update of all the activity:
- We finished the updates on the first property we bought and I finally stopped writing check after check on it. I'm still sorting through (for taxes) what were my capital expenses (which will add to the value of the homes and be depreciated over many years) versus start-up and operating expenses (which I can deduct for tax year 2012). Once I get those finalized, I'll post them for you so you can see the complete financials.
- The good news is that we rented out both of the homes on the first property! The main house went for $1,100 per month and the second place went for $900. This is $100 more per month than I estimated in my financials (I had the first place at $1,100 and the second at $800), so that's a nice surprise. These places went quickly once I put my new management company in charge of marketing them (see below).
- We finished remodeling two of the units on property #2. The final costs are coming in, and they are going to be higher than what I thought they would be. Hopefully, the rents will be higher as well. Once I get both costs and rents, I'll report back. I'll also snag some pictures because the places look GREAT!!!
- January was the first month that I got a deposit. I was so excited to see $2,700 (from property #2) deposited automatically into my account. I can't wait until this happens more frequently and with higher amounts! :)
- Remember when I bought appliances for property #1 at Lowe's and saved a bundle by stacking offer upon offer? Well, I did it again (plus 1) with the appliances for my second place. I called the Lowe's manager and asked if she'd give me the same sales prices as last time (which were their Black Friday prices). She said they would. I added on a 10% coupon from my realtor (I get those each time I buy a place) as well as 6% cash back because I paid in Lowe's cards I bought with my Amex Blue Cash Preferred card. This is the deal I got last time as well -- which added to a 40% savings off retail. But this time, Lowe's had a rebate going so I got another $400 in Lowe's credit! That's like getting a range for free!
- If you recall, my real estate advisor, Bob, was going to manage the properties for me. Well, he backed out of that offer. But when I purchased property #2, it had been managed by a leading property management firm in our area. I did some research and they seem well liked and recommended among the real estate people I talked to. In addition, my personal contact at the firm is awesome -- very attentive, professional, and responsive. So I signed up with them as my management company (giving them both properties). They cost me the same as Bob (8%), but offer a lot more services (their accounting/reporting/bill paying is GREAT) They've already saved me a ton of money (snow plowing I would have paid $900 for cost me $500 because they bid out all their 500 units for one low price) and made me money (rented the two places at property 1 that Bob had been trying to get rented for a month. I will let you know how this relationship progresses as I know many of you are skeptical of property management companies.