Archive for the ‘purchase second home and turn current home into rental’ Category

Our First Rental House Plunge

Wednesday, May 22nd, 2013

By Terry & Angy Sprouse

 

We (Terry & Angy) are partners in both marriage and in real estate business.

Who says married couples can’t be business partners? And the great thing is we have never considered divorce . . . murder sometimes, but never divorce. Well, never murder, really, but maybe forcing each other to watch, in an uninterrupted viewing, the horrifyingly bad movie, The Clan of the Cave Bear.

In reality, this business has been a bonding experience, not only for us, as husband and wife, but also for our two boys, who have been active participants in the business from the very beginning.

9/11 Attacks Take the Starch Out of Us

We started in real estate investing following the terrorist attacks on the World Trade Center. The ensuing economic recession forced our hand. The hours at Terry’s job were drastically reduced. We realized that for the security of our family, we needed to have a business on the side—a business able to provide regular cash flow in case Terry’s 9 to 5 job suddenly went away.

This led Terry to experience a very intensive period of soul searching and in-depth research (accompanied by gratuitous whining and moping). We decided that a rental house business was the best way to go. We were excited to find the rental business was an easy business to learn and to start. This business required no special license, degree, or training. And the results tempered the most important source of Terry’s whining. The rental business offered the potential to make money.

We Jump In and Hope the Net Appears

We essentially just jumped in with good intentions and very little practical knowledge. After we made up our minds that this is what we wanted to do, we simply bought an inexpensive fixer-upper house, one that had foreclosed and been repossessed by a bank. We moved into and lived in the fixer-upper house while we did the necessary repairs.

But most importantly, we did not sell our original home. We rented it out.

Angy Puts Her Foot Down – On Top of Terry’s Foot

It took a little adjustment to move into that first fixer-upper house. The first thing we did was to get one of the bathrooms back into working condition. Angy’s negotiating stance on that topic was, “I’m not living in that house unless at least one bathroom is fully operational!” At that, who could argue? Marveled by a mother’s logic, together Terry and the boys nodded their heads and dropped the labeled empty plastic bottles they held in their hand into the Recycle Box.

As we went forward with the repairs, we changed bedrooms frequently. Moving from room to room, we cleared out of one bedroom to install tile and then moved again out of the next to make room to install carpet. Huffing and puffing, we moved furniture from one side to the next as we worked through the house painting all the walls. We replaced the cabinets in the kitchen, the fixtures in the bath, the leaky plumbing and the outdated lighting.

Group Hugs

Preparing meals required serious creativity. Entertainment and rest required the same. But the support and flexibility from all family members, and a few timely “group hugs” (some through gritted teeth), got us through.

 

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Recommended reading:

Remove that Garbarge Disposal Now!

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

How I Evicted A Problem Tenant in 4 Steps

When to Hire a House Inspector – Radio Interview with Rich Peterson

Getting Rid of Bad Tenants

“Turn your home into a rental” on Mark Wayne Show

7 Reasons to Live in a Fixer-Upper House While You Repair It

6 Steps to Roof Maintenance (for the Home that will Turn Into a Rental House)

Our First Rental House Plunge

10 Most Frequent Problems Found by House Inspectors

5 Steps to Get Your House Ready to Rent by Terry Sprouse

5 Steps to take if your house is flooded

Some perfectly legal ways to maximize your rental profits

Add “Start a Rental House Business” to Your Bucket List

The 5 Rules on How to Lose Money and Get Your Rental Property Trashed by Tenants

Window Repair with #2 Son

Required Roof Maintenance for Fixer Upper Houses

Learn to Repair Your Fixer Upper Houses

How I Got Started In Fixer-Upper Houses

How to learn to operate a fixer upper house business

The Peaceful Warrior and Fixer-Upper Houses

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“Turn Your Home Into a Rental House!” finally sees the light of day

Wednesday, May 15th, 2013

 

Although it took a little longer than we anticipated, “Turn Your House Into a Rental House Instead of Selling It!” has finally popped out of the incubator and is available as a paperback book.

In a nutshell, what is this book about?

With my charming wife and business partner, Angy, as co-author, we have created a guide on how to find properties, live in them, and then turn them into a rental house, instead of selling them.

According to the “American Association of Realtors,” the average American purchases seven houses during their lifetime. Angy and I believe that those seven houses should be converted into rental houses and held for the rest of our lives. They are valuable assets that will generate monthly income for the hard years to come, and provide further assurance of long-term economic family security. Like the old folktale says: “Don’t kill the goose that lays the golden eggs.”

How does this book help the average Joe?

We show the average Joe where to find the best properties, how to pay for your houses, property inspection, the nitty-gritty steps on how to prepare your new rental house for tenants, how to attract and screen tenants, managing tenants, and complying with EPA regulations. The appendix includes samples of leases, property inspection sheets, tenant selection rating sheets, and many other valuable forms to get you started in your rental house business.

What do millionaires do that most people don’t do? 

Go into politics?

Buy their own Starbucks?

Become a bearded recluse?

Well, those are some of the things they do, but according to Thomas Stanley, in The Millionaire Next Door, most American millionaires own their own houses, and they own at least one rental property.

Our perspective is, “If it works for millionaires, it ought to work for us too.”

Our hope is that this book will inspire you to buy a rental property and to receive the enormous benefits from that one bold action. Even if you buy just one rental property throughout the course of your entire life, your economic picture will almost immediately get better.

You may wonder, as we did, “Why didn’t we do this a long time ago?”

Where do we order this book?

Click here to order the book through Amazon.com.

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Recommended reading:

The Short and Sweet Guide to Target Retirement Funds at Fearless Men

Creating an Outsourcing Master Plan For Your Business at Louisville Gals

Top Sights In Australia For The Adventure Seeker at Untemplater

Is There Right Time to Buy Real Estate? at KrantCents

How To Easily Reduce Your Utility Costs | 5 Simple Steps FRugal Habits

How Big Should Your Emergency Fund Be? at Work Save Live

Working Towards A Debt Free Lifestyle In 8 Steps at Canadian Budget Binder

Help Me Spend $1100! at Eyes on the Dollar

How You Can Start Freelancing at the End of This Article at Modest Money

Required Roof Maintenance for Fixer Upper Houses

Monday, July 2nd, 2012

One of the jobs associated with operating a fixer upper and rental house business is to keep your rental properties in ship shape!

With the annual approach of summer rains, now is almost the last chance to make rental house roofs water proof before the watery onslaught. As someone who has a sworn aversion for arriving too early to parties, I subscribe to the time-tested philosophy of “better late than never.”

This morning I applied some black roofing cement on some areas on one of my townhouse roofs. I had located some cracks upon my inspection of it about 2 weeks ago.

The first photo shows the area in question, where I had previously applied a small amount of plastic roofing cement, but today I was going to put on some more and cover a broader area.

Before picture

The second photo shows the application of the plastic roofing cement. We apply one layer of cement, then put a white membrane on top of that, followed by a second layer of cement. The membrane allows for more cement to be applied.

Application of roofing cement

Below is the “after” photo. You can see that in addition to the corner, we hit a few other cracks with our roofing cement on the sides of theroof. Later, we’ll come back with white roofing paint to cover the black cement.

Completed repair

A good rental house

My wife and I purchased this 2 bed 2 bath townhouse in 1993 and lived in it for 10 years before moving on to a bigger house (to accomodate our growing family), and turning this property into a rental house in 2003.

Its been one of our best rental houses because it is in a “transition” zone (aka “opportunity zones”) where there is heavy demand for housing, and it is easy to care for because it is compact (1100 sq ft with small front and back yards). The townhouse perfect for single people or small families.

We originally purchased it for $53,000 and we charge $750/month (more if the tenants have pets).

Related Posts

Remove that Garbarge Disposal Now!

Tax tips, forclosure houses, and self directed IRAs for real estate investors (video)

Saturday, March 17th, 2012

It’s an honor, once again, to have tax accountant, Sean McCoy, E.A., Chartered (PC), discuss tax tips for real estate investors, particularly in light of the looming deadline to submit income taxes.

Today Sean will discuss:

1. Changes to the tax code that affect real estate investors;
2. Issues related to purchasing forclosed properties;
3. Pros and cons of self-directed IRA accounts to purchase real estate; and,
4. Tax considerations when owning out of state properties.

Here is the complete YouTube interview.

Control Your Thoughts & Reach Your Dreams

Monday, October 25th, 2010

What things do you actually have control over in your life?

When you think about it, there are actually very few things that we can control.

For example, I was forced to give up my dream of boxing. I ruined my hands in the ring. The referee kept stepping on them.

We are required to buy insurance for our cars and houses. The kids must go to school and have supplies and clothes. We choose food, cars and most consumer goods based on the advertisements we see on television. Different levels of government and social pressures decide many things for us, or leave us with limited options to choose from.

And, it doesn’t get any better as time moves on. It seems the older we get, the fewer choices that we have. Men still chase women when they get older, but only downhill.

The One Thing We Control

Napoleon Hill says that we have control over but one thing, the ability to control our own thoughts. This is the most significant and inspiring of all human traits. It is part of our divine nature. This divine tool is the sole way to control your own destiny.

Mind control is the result of self-discipline and habit. You either control it or it controls you. The most effective way to control your mind is by keeping it busy with a definite purpose, supported by a clear plan.

The Ultimate Question

A lot of people I know have read Think and Grow Rich, and they say that they think it is a great book. But, very few know the answer to the following question.

What does Napoleon Hill say that you must do twice daily in order to make your desires become reality?

On page 36 of my copy of Think and Grow Rich, Napoleon Hill says that you should have:

1.) written a concise statement of what you want,

2.) how you plan to get it, and

3.) when you will get it,

then you should read your written statement aloud twice daily, once before retiring at night and once after arising in the morning.

What Does This Have to Do With Real Estate?

In the early 2000’s, I thought my job was going to be cut and I that would be unemployed. I decided I needed a steady second income so I wouldn’t have to rely on my 8:00 to 5:00 job to bring home the bacon .

After I concluded that buying fixer upper houses and renting them out was the best second income for me, I wrote down my desire on a piece of paper and carried it around in my wallet.

I wrote, ” I will find and buy a fixer-upper house in the next 60 days.” In less than a month, I found and bought my first fixer upper house, and that was my start in this business.

That was the first time I experienced the power of this technique. I have had many subsequent successes with the technique as well.

Like most of us. you have ideas and dreams. But, if you go beyond just identifying them and you write them down, and put your passion into them, they are more likely to come true.

Confessions of a Fixer-upper-holic

Turn Your House into a Rental Property: Podcast of radio interview with Dan Ramey

Thursday, September 23rd, 2010

Here is my radio interview with Dan Ramey of WBEX in Chillicothie, Ohio.

I described the process that I use to turn a house into a rental property. I advocate that people use this when they are ready to buy a new house. Instead of selling their old house, they should just turn it into a rental property.

The average American buys 7 houses during their lifetime. If they kept all their old houses as rentals, they would have a pretty substantial monthly income by the time they retired.

Interview with Dan Ramey 09-15-2010

 Related Posts

Remove that Garbarge Disposal Now!

Money for buying rental houses

Tuesday, August 10th, 2010

A good question came up today during my radio interview with Dave Kebler of WRNJ Radio in Hackettstown, New Jersey.

I was asked if it was now impossible to get a loan, either to refinance a house or to purchase a fixer upper rental  house.

The answer is no, it is not impossible to get a loan. Granted, it requires more paperwork and squeaky clean credit, but loan money is still available and at great 4.5% rates for 30 year loans.  I have taken out 3 loans in the last 12 months.

Is it worth it to take out loans for investment properties?

The economy is still as flat as Rush Limbaugh’s trampoline, but there has never been a better time to invest.  From the perspective of mortgage interest rates and low real estate  prices, this is a time of great opportunity.

When I was a Peace Corps Volunteer in Central America,  people would ask me if the streets of American were paved with  gold. I said, they’re not paved with gold, but they are paved with opportunity. And they still are.

Upcoming radio interviews

Aug. 11, 8:10 am, Mark Wayne show, WICH 1310 am, Norwich, Connecticut.

August 17, 6:50 am, Jason Mansmith show, WRPN 1600 am, Ripon, Wisconsin.

August 20, 8:30 am, I will be on David Sutton’s show, KSRN 1490 am, Los Alamos, New Mexico.

August 25 at 8:08 am,  I will be on Jeff Anderson’s show, KSDR 1480 am, Watertown, South Dakota.

When we buy a fixer upper house, “we are what we are”

Monday, August 2nd, 2010

I was watching the movie Australia last night, starring Nicole Kidman and Hugh Jackman. It was such a classic tale that it sent chills down my back.

A man starts up a small cattle empire in the outback of Australia. He is killed and his inexperienced wife has to take over the operation. She’s in way over her head, but in order to save the ranch she has to drive the herd thousands of miles to the market. She asks her ranch hand to lead to trail drive.

The tough ranch hand assembles a rag tag group, which include of a drunk, two aboriginal women, a young boy, and the wife, to herd the cattle.  Despite stampedes, poisoned watering holes, and other travails, they keep moving on.

We are what we are

Before the trip begins,the ranch hand addresses his team and goes over the “dos and don’ts” of working a cattle drive.

At the end of his speech he says, “Well, we are what we are.”

He said it with some degree of exasperation at having to use vastly unqualified people on the drive.

But, I also thought that he said it with a sense optimistic determination. As if he is saying, “This is all I have to work with. Its not as good as it could be, but I’m going to make it work and we’ll get these cattle to market.”

I am what I am

When you buy your first fixer upper house, it also requires that you take the attitude that “Well, I am what I am.”

You don’t have all the experience that you might want to begin, but you don’t let that stop you. There’s a lot to learn and you learn as you go. Your determination gets you over a lot of obstacles.

Upcoming Radio Interviews

August 20, 8:30 am, I will be on David Sutton’s show, KSRN 1490 am, Los Alamos, New Mexico.

August 25 at 8:08 am,  I will be on Jeff Anderson’s show, KSDR 1480 am, Watertown, South Dakota.

Watch this space for further developments!

Welcome to my new ‘fixer upper and rental house’ blog home!

Friday, May 7th, 2010

Welcome to my new website.

Make yourself right at home. Pull up a chair, have a cup of coffee, and check out some of my articles, useful links, or previous posts. Hopefully, you’ll discover some useful investing information.

To keep you in the loop, I am developing some new resource materials to help you get started in the house fixer-upper and rental business.

First and foremost, I am putting the finishing touches on my new book entitled “Never Sell Your Home! How to turn your home into a rental house.” Watch this space for further developments.

Even with rising interest rates, now is still a good time for do-it-yourselfers to start a new income stream with a rental house or two. House prices are still at rock bottom lows, but before too long they will start moving up again.

The key is to find a good fixer-upper house in a location where people like to rent. It’s still the best way to start your own business, and establish some long-term economic security!

Sometimes going through tough economic times is just the push that we need to start on a new path.

When tough times hit, I like to reflect on Lincoln’s saying, “We can complain that the rose bushes have thorns, or we can rejoice that the thorn bushes have roses.”