Who is Your Worst Landlord?

Who is Your Worst Landlord?

  • Investor Group LA
  • 01/19/24

In 2018 my brother and I were in search of some single family home deals in my hometown of Richmond Virginia. Richmond is a place where, at least in 2018, you could buy a house for $150,000 and rent it for 1% or $1,500 a month. Already having a few SFRs in the area, my brother decided we should inquire with our property manager to ask “Who is your worst landlord?” Whoever that is, is surely tired of being a landlord and would likely be willing to sell their portfolio.

It didn’t take long for the answer. It was a guy who’s elderly parents (who were investors) had passed and left some houses to him. He (the son) in turn, let them sit vacant in disrepair for years and years. Although property management had urged him to fix them up so they could be rented, he didn’t have the time or money to do anything. So they sat there.

There were 3 houses. All in decent neighborhoods, but all in need of about $30,000 in repairs.

So, we offered $350,000, as is, with a quick close. The guy told us, through our agent / property manager, to kick rocks. A few months later he called our agent / property manager back and asked if we were still interested. He had come to his senses and was now willing to sell them to us for $400,000. But by now, we knew he was in a tough spot, so we lowered our offer to $325,000. After some whining and complaining, he agreed and we closed on 3 houses for $325,000.

Now came the fun part. Two new roofs, 3 full kitchens, 6 full bathroom renovations, 3 total floor replacements, 3 total patch and paint jobs, 14 tree removals, and 2 new driveways later, we had 3 rentable houses.

Today, the market value for the 3 houses is around $900,000, and each of those houses cash flow approximately $600 per month. This is after paying the mortgages, property management, maintenance, and while saving for Capex and Vacancy.

Now, how many $600 per month properties would you need, to have your passive income replace your current income?

Recent Blogs

Work With Us

Jacobellis Group will manage every aspect of your buy or sell, including managing renovation projects, helping with interior design and making sure we maximize your financial gain with proper strategy. Achieve your financial dreams through real estate!

Follow Us on Instagram