As 2015 draws to a close, it is time to look back.
In some parts of the country, the real estate market has heated up. Even though there are are not as many great deals as there was 5 years ago when I started this site, there are plenty of great deals. The fact that prices are higher than they were 5 years ago means that it is even more important to have someone help you along the path. Let me tell you about the properties I purchased this year.
Property #1. I bought this property with the intent to "flip" it. Because this is a short term investment, there are no tax advantages to this investment. Therefore I bought this one with my IRA. I bought it in March and paid $42,787 which included all closing costs. I paid a total of $15,095 to do all repairs. I paid a total of $409 for all utilities and $296 for insurance for the 5 1/2 months that I held it. I didn't do any of the work myself - I couldn't if I wanted to (and I didn't) because it was in an IRA. I sold it on September 1st and the total cash I received was $73,457, which again included all closing costs. This corresponds to a return of 25.4% in less than 5 months! A calculation of the annualized internal rate of return, which takes into account when the cash was needed, yields 58.7%!
Property #2. This property was intended as a long term investment. On July 1st, I purchased it for $74,000. I am renting it for $925/month. My taxes, insurance, and property management come to $275/month. If I put away $50/month for eventual repairs that comes to a cash flow of $600/month giving a 9.7% cash on cash return. The great thing is that Zillow estimates this property to be worth $120,000, which gives me a 62% return in appreciation already. Now I could finance this property, pull out my original $74,000, and effectively have an infinite return!
Property #3. The third property was purchased with the proceeds of 1st. It will also be a flip. I purchased it in late November, paying $45,322 including closing costs. So far I have paid $30,000 in repairs and will be putting an additional $10,000. I hope to sell it for $115,000. The return should be somewhere around 23% in about 6 months (or an internal rate of return of about 47%. I will let you know in a future blog.
If you want to get going on real estate investing, leave your contact information. Happy New Year and Happy Investing!
In some parts of the country, the real estate market has heated up. Even though there are are not as many great deals as there was 5 years ago when I started this site, there are plenty of great deals. The fact that prices are higher than they were 5 years ago means that it is even more important to have someone help you along the path. Let me tell you about the properties I purchased this year.
Property #1. I bought this property with the intent to "flip" it. Because this is a short term investment, there are no tax advantages to this investment. Therefore I bought this one with my IRA. I bought it in March and paid $42,787 which included all closing costs. I paid a total of $15,095 to do all repairs. I paid a total of $409 for all utilities and $296 for insurance for the 5 1/2 months that I held it. I didn't do any of the work myself - I couldn't if I wanted to (and I didn't) because it was in an IRA. I sold it on September 1st and the total cash I received was $73,457, which again included all closing costs. This corresponds to a return of 25.4% in less than 5 months! A calculation of the annualized internal rate of return, which takes into account when the cash was needed, yields 58.7%!
Property #2. This property was intended as a long term investment. On July 1st, I purchased it for $74,000. I am renting it for $925/month. My taxes, insurance, and property management come to $275/month. If I put away $50/month for eventual repairs that comes to a cash flow of $600/month giving a 9.7% cash on cash return. The great thing is that Zillow estimates this property to be worth $120,000, which gives me a 62% return in appreciation already. Now I could finance this property, pull out my original $74,000, and effectively have an infinite return!
Property #3. The third property was purchased with the proceeds of 1st. It will also be a flip. I purchased it in late November, paying $45,322 including closing costs. So far I have paid $30,000 in repairs and will be putting an additional $10,000. I hope to sell it for $115,000. The return should be somewhere around 23% in about 6 months (or an internal rate of return of about 47%. I will let you know in a future blog.
If you want to get going on real estate investing, leave your contact information. Happy New Year and Happy Investing!
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