Our handyman did most of the work, including the flooring, the roof work, and the general clean up. Our A/C guy installed the A/C when the tenant/buyers moved into the property.
I do want to mention quickly about the roof repair in that the main issue was caused by the skylight in the master bathroom. In my opinion, these skylights are like ticking time bombs where a leak seems to be inevitable. We took out the skylight and patched over the hole in the ceiling and roof.
Finding a Tenant-BuyerThe number of calls was definitely less than what we had experienced with our last couple of properties; however, we did get a few people to go by the home to check it out over a 2-3 week period.
One couple liked it and met our qualifications.
At this point, we had dropped our requirements to $550 per month and $1,200 down. With this property I had started offering that for a larger down payment, we would take an additional amount off of the principal. Again this wasn’t a requirement but was simply a bonus offer. The couple agreed to put $3,000 down and we reduced the principal by an additional $2,000.
Wouldn’t this large of a drop in price reduce our yield?
The answer is yes in the long run, but I have always found that collecting more upfront is much better than hoping that you will collect more in the long run. The fact is that even though we hope to sell the property to all of our tenant-buyers, most of the properties will turn over.
This lowered the term from about a 13-14 year term to an 11.5 year term. We will still make plenty of money on the deal if the tenant-buyers pay off the property.
If you look back to our first land/home deal (property #2), I thought we would be rich at the end of the 30 year term with our first tenant-buyer; however, that family left after a year.
Fast Forward To TodayAlmost a year later in early 2014 and the same tenant-buyers are still with us. Occasionally, they will pay late, which is a nice bonus for us.
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