141 Dickson (rent then sell)

141 Dickson (rent then sell)

147 Dickson street - year 1982. Two bedroom one bath, with a one bedroom garage apt. purchase price of $28,000.00 with $4,000 down and owner financing at 10%. Twenty year amortization with a ten year balloon payment. Payments of $231.61 per month. Taxes were $245 per year, and make ready, was $729 including a used stove and ice box. Rent collected was $200 for the house, and $150 for the apartment.

Positive cash flow after tax allowance and payment was $97.97 per month. a 24% return on the $5,000 cash invested (down payment, plus make ready). A good return except that I had half of my $10,000 tied up in one home.

The advantages were:
1. Owner financed.
2. No credit check.
3. Reduced closing cost and no points.
4. At the time 10% was a good interest rate.
5. No tax or insurance escrow.
6. Positive cash flow.

I sold this home two years later to free up my cash. Today, with credit cards being so widely in use, I would have borrowed the money and kept the house. I sold the house for $32,000 after closing cost and real estate commissions I made $1,200, plus another $700 because I called the note holder and asked her to discount the note if I paid her off early. She agreed to take $700 less.
The return was good and I learned a lot, but I do wish I could have kept the property, the owner today gets $1,150.00 a month rent from the property. I was on my third house by then and needed the money to complete that project. This house was purchased through a real estate agent, thus the high down payment to cover the sales commission.