It’s been a busy week. Kaitlin and I closed on three new houses. All of them need rehab work. One needs an insane amount, but it will be a fun project (I hope).
The crazier thing is that none of these houses were on our radar until last Wednesday, the 13th. I was driving back home after securing a house we’d taken back from an eviction (more on that in an upcoming post) when my phone rang. It was Dave, a realtor I worked with to buy one of our first Detroit rentals. We’ve taken some stabs at others since then, but haven’t been able to get an offer to land.
Dave had emailed me that morning about a house on Courville St. in Detroit’s 48224 zip code. He knows I’m looking for more over there, and I’d recently told him I’m hunting for a full rehab. This one fit the bill. It’s a 3 bed, 1 bath brick home, and a gorgeous old home on a very strong block. I know the area well and essentially committed to buying it as long as we could get it under $38k.
But that’s not what Dave was calling me about. An agent in his office was supposed to be closing on a home off Chandler Park Drive on Farmbrook St., also in the 48224 zip. The buyer did their final walk through the morning they were supposed to close and walked, leaving the owner occupied seller high and dry with their packed U-haul in the driveway.
The house had been listed at $20k and the buyer had talked them down to $14k. Dave said it was a good deal, and I believed him. I was ready to buy it on the spot but he wanted me to walk it first.
The next day, Thursday of last week, I drove down and walked Farmbrook. It’s another 3 bed, 1 bath, all brick house. It’s rough, but I like the location a lot. Comps fall in the $55k – $60k range and it needs probably $25k – $30k of work. Not incredible, but a solid buy-and-hold.
After that, I shot over to Courville with a friend and we managed to get into the house. I loved what I saw and texted Dave that I’d move on both.
A crazy quick close
The title work was already done on Farmbrook, seeing as they were supposed to close last Wednesday. So we closed that this Monday for $14k. The woman at the title company was actually working on Sunday, calling me, and getting it wrapped up for Monday. Impressive. It was by far the quickest I’ve seen a house and closed on it (just two business days).
There also happened to be a two-unit house up for auction on the Detroit Land Bank Monday night. The house is in the 48238 zip code, specifically in Russell Woods. It sits across the street and five houses down from one we already own. I knew it was coming up, but hadn’t decided if I’d stab at it. I figured after having bought Farmbrook and closing on Courville, I’d better pass.
But I didn’t.
We won the auction for $8,000. The jury is out on whether that’s going to be a smart buy or not. I’m hoping we can complete the rehab for <$70,000 but I’m not holding my breathe. I haven’t been inside the house yet, but the detailed photos clearly depict a house in far worse shape than I’ve ever tackled. That said, we’re hoping to spread it out over time. I wouldn’t be surprised if the rehab takes us 18 – 24 months.
Today we closed on Courville for $37k, making that the third house this week. We estimate it needs $40k – $50k in rehab. The one next door sold for $105k over the summer, and comps go as high as $125k. So that should be a nice win.
Lots of work ahead
I’d love to say I’m looking forward to a break, but that was the easy part! It’s been an even busier month and a half. We picked up two houses in mid October via the Detroit tax auction. So we’re now sitting on 9 total properties, two of which are duplexes, comprising 11 total doors.
Of those 11 doors, only 3 of them have tenants right now. And seeing as most of these have 5-6 months seasoning left before we can refinance, we’re going to have to pick and choose our battles. That said, two doors are already financed out and just need some relatively light work to get rented.
It should be an interesting 3 – 6 months! 🙂