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I've been working since I was ten years old and am currently 48 years old with no retirement plan, except to work till I die. I started with a paper route, then had a lawn care business while in high school. I've always had a job to pay bills.
My latest venture.
I rented half of a duplex in 1994, then bought the duplex four years later for $100K. I live in one side and rent out the other - with refinancing in 2002, I only have 4 more years to pay it off. When paid off, I thought the extra $600/month would be nice to have, as long as I kept working.
The people I bought the property from also owned two identical duplexes right next door and around the corner - think "L" shape. Ever since 1998 they bugged me to buy the other two, but with the housing market being inflated, the prices were between $100k-$125k for each. With prices that high, you collect rent and pay bills, with not much left over as a cushion. The woman died a few months ago and the family had them on the market. They started at $98k and lowered the price as much as $69k for each. They again offered them to me a month ago for $65k each or $120k for both. I turned them down once again. That evening I was plugging numbers into mortgage calculators and realized there was potential monthly profit of $1300 after mortgage, taxes, and insurance payments. All units are rented out currently, so I could just take over. My brother does home loans, so I contacted him. He said I needed 20% down to even have a chance of getting a loan for rental property, so I needed to come up with $24k or it was a no go. I noticed I had $22k in an old 401k plan that was doing nothing for me, so I contacted the agent and found out I could cash it out for $17,600. Friends advised me to offer lower, so I contacted the family and offered $100k for both properties and they accepted, so I only needed a $20k down payment. The loans are being processed as I type, and I should be closing in another week or two. I'll be financing $80k for both properties - rental income of $2350/month and 30 year loan payments of ~$800 month with taxes and insurance. I could pay them off early if that's what I decide to do. Turn key profit of $1500/month, which basically will double my income overnight. If work needs to be done and I can't do it, then I could afford to pay someone - all a tax write off. I can still profit in a month if I have two vacancies.
I live in the unit on the far left, and bought the vacant lot to the left of mine last year. The new purchases will buy the duplex to the right and the one around the corner - solid brick construction, well-maintained, new furnaces and central air, both got new roofs a few weeks ago. The swimming pool was filled in about three years ago, so no headaches there. Five rental units all in a bunch with monthly income of ~$3000. Maybe I can think about retirement.
Posts in this Thread:
- Good things can happen to people who work hard., DougM , Mon, 22 Oct 2012 14:03:06 <-- Viewing This Message
- Re: Good things can happen to people who work hard., turbocon86, Tue, 23 Oct 2012 07:48:40
- wow, SRS900S, Mon, 22 Oct 2012 21:51:13
- Pay down the loan with some of the profit..., Mark from Toronto, Mon, 22 Oct 2012 20:26:43
- A very good deal, RS , Mon, 22 Oct 2012 19:06:36
- Congratulations, Tim, Mon, 22 Oct 2012 18:55:45
- Congratulations!, MI-Roger , Mon, 22 Oct 2012 16:23:50
- Re: Good things can happen to people who work hard., NCCaniac , Mon, 22 Oct 2012 14:30:10
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