In this episode, we go over how we bought a $14,750 house! We purchased this rental property out-of-state, fixed it up, and now it’s renting for $650 a month. Stay until the end to learn how we found this off-market and how we fixed it up.
👩💻 For viewers of this video, here is an EXCLUSIVE 50% OFF our Rental Property Analysis Calculator: https://courses.digitalnomadquest.com/p/property-analysis-calculator/?product_id=2808384&coupon_code=YT50 (code YT50)
✅ If you want the step-by-step guide on investing out-of-state to buy rental properties, check out our course Remote Rental Riches! https://courses.digitalnomadquest.com/p/remote-rental-riches
HOW WE BOUGHT A $14,750 HOUSE! 🏠 (Buying Cheap Rental Properties Investing Out-of-State)
Transcription
Below is a transcription of the podcast. This transcription was taken from Otter.ai so it might not be completely accurate:
This is the digital nomad quest podcast with Sharon Tseung. teaching people how to build passive income, become financially free and design their best lives. Hey guys, Chad from digital nomad quest,
and this is Sean with everything, Rei,
and today we’re going to go over how we were able to purchase a property under $15,000. If you guys are new to the channel, welcome, I’m all about teaching how to build passive income, become financially free, and design your best life. So if you guys are interested in that, make sure to subscribe and hit the bell button to be notified on my latest videos. And make sure to subscribe to Sean’s channel where he talks all about real estate investing. So if you’ve been following along our journey, we’re currently at 20 rental units, we’re in escrow for another two units. And I left off with talking about a $37,500 property that I purchased recently. And I know a lot of you guys are interested in our journey in buying cheap rental properties out of state. So that’s why we wanted to talk about this today because we wanted to cover our process, when it came to each of the properties that we are buying.
One of the most interesting things about this particular deal is actually the first property that we bought together. So that was really exciting. I was really happy to finally get something here with you. So
make sure watch till the end, we go over every part of the journey in terms of getting the property under contract the escrow portion
and rehabbing it to get it right and ready and getting tenants inside. So to
start off the story, essentially, I was looking at another property. It was around $30,000 on Zillow, and I sent that to my agent, but we ended up being too slow. And they ended up going with another offer. So we were pretty disappointed. But afterwards, my agent actually texted me and said, we have another property at $20,000. And we’re very interested. And we were like in disbelief that it was so cheap, it was occupied, the tenant was leaving soon and needed a good amount of renovation, it was two bedroom and one bath is 700 to 800 square feet. So it was a pretty small property. But at that price point, we thought it could be a good investment because the tenant was running it at around $375 a month. But we would be able to boost that up to 650 if we were able to renovate it and fix it up for a new tenant, and that tenant was going to leave soon. So we wouldn’t be able to go in and start renovating it quickly. So at that $20,000 listing price, we ended up putting an offer at around $16,250 all cash, and they actually accepted that offer. So we were only able to get that good deal by connecting with an agent that was able to pass us an off market deal because this deal was not actually listed on the MLS, it was something that he knew about and was able to pass on to us. So make sure that when you are trying to find deals, you network with different agents and different wholesalers to help send you deals so that you can find something that works for you. And make sure to also find agents who work with investors, this agent, we actually found him on bigger pockets, and we hit him up and basically connected so that we could potentially work together in the future. So we had this property in escrow. And we made sure to get an inspection report, we hit up this inspector who was able to go in and give us a report. And we found that there was a lot that need to repair. So the agent actually ended up talking them down to $14,750, which was what we purchased this property at when you’re in escrow, make sure you get an inspection report. This is important because you want to make sure everything’s okay with the property. And if not, you’d be able to back out of purchasing the property and you’d be able to get your earnest money deposit back. And if you’re going to do that, make sure that you are doing it within two days or so of purchasing the property because you only have really a 10 day window to do this.
Because you bought this property with cash. We didn’t have to go through a lender and go through all of their requirements. So we didn’t have to go through an appraisal when we signed loan documents. It was only one page versus when most popiah alone have like a fat stack and were able to close on time and just wire the funds directly to the escrow account. We got the inspection report, we saw how messed up it was.
Here’s some photos that you can see that before and you can see is pretty messed up.
We were surprised that people were actually living and paying rent for this property. It was really small property and no central Apex system. And we’ve had wall furnaces that didn’t work. So individually in each room, they had these small space heaters and had no AC systems so they had these window AC units that were ruining the windows. So we went in there we figured you might just do it right let’s go in there and replace everything. And when we finally closed on a property and our property manager walked the property just knows that the roof was significantly damaged. I suggested that we repair the roof as well.
Also when we were actually buying this property they didn’t told us it would be around five to $10,000 in repairs, but it ended up being more ended up costing a little bit more because we wanted to do more renovations on it made sure that it had a new age HVAC system had a new roof so some of these things cost more to repair.
Honestly, we were super surprised because we have experienced with doing renovations in properties here in the Bay Area and also on some of our other properties. So every market is different when it comes to the repair costs. So for us to do a full renovation, I mean seeing the barrier it costs like seven to $100,000 over there, the entire renovation, including adding new HVAC system, and the new roofing only cost us $13,000. Now again, this is a pretty small property but still $13,000 to do a complete renovation
and in comparison with my $23,000 property that you might have seen him Previous video, I actually renovated that one at $33,000. And this one was at $13,000. And the square footage is actually pretty comparable, it was around 800 to 900 square feet, I believe. So your renovations are really going to vary in cost depending on the market that you choose the one at $23,000 was actually in a different market. So this other market that we are working in currently is actually a lot more affordable
and says we do live in the Bay Area and our properties on the other side of the country, we really had to rely on a property management team to help us find contractors who are trustworthy and could do this project on time, it was a complete renovation, but it only took us around six weeks to get the whole thing completely repaired and ready to go on the market for rent.
So we are now currently putting in new tenants and they’re going to pay $650 a month for this place. So all in on this property we put in about $28,000 But we’re going to go into more of the numbers in our next video. So make sure to watch out for that one. Overall, this property was extremely affordable. And now it’s going to be this cash flowing rental property for us. So we’re super excited about that. So if you’re
interested in learning how to buy your own out of state rental properties, check out our course remote rental riches,
we go over step by step how to purchase your first rental property we go over how to choose your target market and research it how to build your boots on the ground team how to analyze deals can
basically take you from knowing absolutely nothing to buying your very first rental property so make
sure to check it out in the link below. And as a recap for this purchase. Basically make sure to find agents to work with that can send you deals make sure to find agents who have worked with investors as well get inspection reports for your purchases
and make sure you work with a solid property management company who can help you with your renovation projects. The beauty of working with property management companies to help you with your rehab projects is they know exactly what it takes to rehab a project for rental purposes
when it comes to renovations people have different ideas of how they want to design it but ultimately property management companies are really reliable because they usually know what will rent out well in their market
so they’ll be design your property to fit the rental standards without going super crazy like HGTV standards.
So hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.Transcribed by https://otter.ai
and this is Sean with everything, Rei,
and today we’re going to go over how we were able to purchase a property under $15,000. If you guys are new to the channel, welcome, I’m all about teaching how to build passive income, become financially free, and design your best life. So if you guys are interested in that, make sure to subscribe and hit the bell button to be notified on my latest videos. And make sure to subscribe to Sean’s channel where he talks all about real estate investing. So if you’ve been following along our journey, we’re currently at 20 rental units, we’re in escrow for another two units. And I left off with talking about a $37,500 property that I purchased recently. And I know a lot of you guys are interested in our journey in buying cheap rental properties out of state. So that’s why we wanted to talk about this today because we wanted to cover our process, when it came to each of the properties that we are buying.
One of the most interesting things about this particular deal is actually the first property that we bought together. So that was really exciting. I was really happy to finally get something here with you. So
make sure watch till the end, we go over every part of the journey in terms of getting the property under contract the escrow portion
and rehabbing it to get it right and ready and getting tenants inside. So to
start off the story, essentially, I was looking at another property. It was around $30,000 on Zillow, and I sent that to my agent, but we ended up being too slow. And they ended up going with another offer. So we were pretty disappointed. But afterwards, my agent actually texted me and said, we have another property at $20,000. And we’re very interested. And we were like in disbelief that it was so cheap, it was occupied, the tenant was leaving soon and needed a good amount of renovation, it was two bedroom and one bath is 700 to 800 square feet. So it was a pretty small property. But at that price point, we thought it could be a good investment because the tenant was running it at around $375 a month. But we would be able to boost that up to 650 if we were able to renovate it and fix it up for a new tenant, and that tenant was going to leave soon. So we wouldn’t be able to go in and start renovating it quickly. So at that $20,000 listing price, we ended up putting an offer at around $16,250 all cash, and they actually accepted that offer. So we were only able to get that good deal by connecting with an agent that was able to pass us an off market deal because this deal was not actually listed on the MLS, it was something that he knew about and was able to pass on to us. So make sure that when you are trying to find deals, you network with different agents and different wholesalers to help send you deals so that you can find something that works for you. And make sure to also find agents who work with investors, this agent, we actually found him on bigger pockets, and we hit him up and basically connected so that we could potentially work together in the future. So we had this property in escrow. And we made sure to get an inspection report, we hit up this inspector who was able to go in and give us a report. And we found that there was a lot that need to repair. So the agent actually ended up talking them down to $14,750, which was what we purchased this property at when you’re in escrow, make sure you get an inspection report. This is important because you want to make sure everything’s okay with the property. And if not, you’d be able to back out of purchasing the property and you’d be able to get your earnest money deposit back. And if you’re going to do that, make sure that you are doing it within two days or so of purchasing the property because you only have really a 10 day window to do this.
Because you bought this property with cash. We didn’t have to go through a lender and go through all of their requirements. So we didn’t have to go through an appraisal when we signed loan documents. It was only one page versus when most popiah alone have like a fat stack and were able to close on time and just wire the funds directly to the escrow account. We got the inspection report, we saw how messed up it was.
Here’s some photos that you can see that before and you can see is pretty messed up.
We were surprised that people were actually living and paying rent for this property. It was really small property and no central Apex system. And we’ve had wall furnaces that didn’t work. So individually in each room, they had these small space heaters and had no AC systems so they had these window AC units that were ruining the windows. So we went in there we figured you might just do it right let’s go in there and replace everything. And when we finally closed on a property and our property manager walked the property just knows that the roof was significantly damaged. I suggested that we repair the roof as well.
Also when we were actually buying this property they didn’t told us it would be around five to $10,000 in repairs, but it ended up being more ended up costing a little bit more because we wanted to do more renovations on it made sure that it had a new age HVAC system had a new roof so some of these things cost more to repair.
Honestly, we were super surprised because we have experienced with doing renovations in properties here in the Bay Area and also on some of our other properties. So every market is different when it comes to the repair costs. So for us to do a full renovation, I mean seeing the barrier it costs like seven to $100,000 over there, the entire renovation, including adding new HVAC system, and the new roofing only cost us $13,000. Now again, this is a pretty small property but still $13,000 to do a complete renovation
and in comparison with my $23,000 property that you might have seen him Previous video, I actually renovated that one at $33,000. And this one was at $13,000. And the square footage is actually pretty comparable, it was around 800 to 900 square feet, I believe. So your renovations are really going to vary in cost depending on the market that you choose the one at $23,000 was actually in a different market. So this other market that we are working in currently is actually a lot more affordable
and says we do live in the Bay Area and our properties on the other side of the country, we really had to rely on a property management team to help us find contractors who are trustworthy and could do this project on time, it was a complete renovation, but it only took us around six weeks to get the whole thing completely repaired and ready to go on the market for rent.
So we are now currently putting in new tenants and they’re going to pay $650 a month for this place. So all in on this property we put in about $28,000 But we’re going to go into more of the numbers in our next video. So make sure to watch out for that one. Overall, this property was extremely affordable. And now it’s going to be this cash flowing rental property for us. So we’re super excited about that. So if you’re
interested in learning how to buy your own out of state rental properties, check out our course remote rental riches,
we go over step by step how to purchase your first rental property we go over how to choose your target market and research it how to build your boots on the ground team how to analyze deals can
basically take you from knowing absolutely nothing to buying your very first rental property so make
sure to check it out in the link below. And as a recap for this purchase. Basically make sure to find agents to work with that can send you deals make sure to find agents who have worked with investors as well get inspection reports for your purchases
and make sure you work with a solid property management company who can help you with your renovation projects. The beauty of working with property management companies to help you with your rehab projects is they know exactly what it takes to rehab a project for rental purposes
when it comes to renovations people have different ideas of how they want to design it but ultimately property management companies are really reliable because they usually know what will rent out well in their market
so they’ll be design your property to fit the rental standards without going super crazy like HGTV standards.
So hope you guys enjoyed this episode. Please make sure to rate review and subscribe. It really helps our podcast grow. And thanks again. I’ll see you guys in the next one.Transcribed by https://otter.ai
