My dear dudes,
I am sorry this heads up took a while more… I’ve been busy… if you follow my blog you’re aware that I bought rental property 3 (RP#3) and I was waiting for the official purchase to be confirmed, as the process when back and forth a few times. Well, I finally transferred it into my name. 🙂 This is sort of a game changer, so I need to explain this deal in detail.
This is a 6-unit rental property (yes I more than doubled my unit count)! Although extremely cheap, I will have to throw a LOT of dollars into it. I payed about €33k for it and I will have to throw another about $15k so it is ready to rent out. Total, I expect to invest about €48k in the purchase, renovation and furniture.
My contractor hasn’t picked up a hammer yet, and I’ve already thrown over €5k into it, distributed among requests to federal and local taxes and bank fees. 🙁
Either way, I added another 6 units to my portfolio and I am finally at 10 units! Shit, the dream is happening… with this rental property, I now have 10 units! I will probably be the landlord of about 25 people, assuming an average of 2,5 people per unit. And you know what? I like this game so much I just submitted another offer (more to come later on…).
First things first. Each of the 6 units of the property has 2 bedrooms, a kitchen, a bathroom, and at least another room (some have two other rooms). It is clearly the most optimized rental property I’ve seen to this day and possibly the best deal of my life. In particular:
- I expect an yield of at least €200/mo per unit, which would leave me at €1200/mo, at the very least. Honestly, I think I will hit more like €280 per unit, on average. Assuming 80% occupancy, I’ve got my capital back (including the renovation costs) in about 4 years. Pretty sweet hum?
- I raised the risk very high. As I will spend €15k (unfunded!) which will leave me at about €25k liquidity, which is rather low considering I owe the bank about €70 G. This will very likely make me sell rental property 1 (RP#1) once the tenants decide to leave. It would allow me to buy rental property #4 and move to a higher unit count (RP#4 will have at least 3 units).
- My liabilities are up by €250 a month, totaling about €500.
- My total rental income will be up to €2000 gross “soon”.
I will now focus on the renovation of the property. Right now, three of the units are pretty much ready to be rented; the contractor will simply repair a few things and get the ball rolling. He will probably take about 4 weeks to finish these 3 units. I need new cabinets, appliances and a few repairs here and there (students are the target here, so I need to have them ready to go).
I hope I start to rent out the units in about a month or a month and a half (I hope to have 3 units rented before Christmas), and I will obviously keep you guys posted.
Chase your dreams. There’s no impossible. Go for it!