Thursday, October 13, 2011

Offer is in!

Back from Omaha!  It was a great trip and I accomplished one of my major goals in going - identifying the neighborhoods where I'd look to purchase rent houses.  

I also accomplished another major goal, which I didn't fully realize I should be aiming toward until it dropped right in my lap:  I met a realtor in Omaha that has 40 rental units in his own portfolio.  Now, I didn't set out to find a realtor with his own investment portfolio, but think about how powerful that is - I now have a resource that knows the local market, understands an investor's perspective and can guide me through the process.

Though we saw several possible rent homes that were on the market, one really stood out.  It's in a cookie-cutter neighborhood where all the houses kinda look the same except for the color, but it's only 5 years old, on a quiet street, but is near a major traffic corridor.  Why do I like that it's in a cookie-cutter neighborhood?  Two reasons:  (1) figuring out the after repair market value from comps is made a lot easier and (2) figuring out what it should rent for is made a lot easier. 

It's a foreclosure property, but it is in pretty good condition, needing only carpet, paint, a new range and refrigerator and a re-leveling of the outdoor a/c unit.  Picture is worth a thousand words, so here's the exterior shot:

It's listed at $99,900, but houses in the area are valued at between $115,000 and $120,000.  Rents are variable between $1000 and $1200 (in fact, four houses away, a home is listed for rent at $1200).

Since we're estimating make-ready at around $5,000, we'd like to get into the house for between $90,000 and $95,000.  Wish me luck - we just put an offer in at $85,000 to test the waters.  Let's see what they say!

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