Author: Paul Branton
When I started at HRS back in 2010, I had the pleasure of being the property manager for one of our investor clients. For the purpose of this story, I’ll call him Dave.
When Dave and his wife brought their first property to us, I believe it was more of a decision for strategic planning rather than a desire to own a rental investment. If you recall, the real estate crash around 2008 had caused home values to decline. It wasn’t a good time to sell a property.
Dave was moving out of the Kansas City area for new employment opportunities. He really didn’t want to sell his property and lose equity, so he and his wife turned to Home Rental Services to professionally lease and manage their former residence.
In hindsight, we can plainly see that this was a wise decision. We’ve been collecting rent for Dave for years. The mortgage is getting paid off. And home values have recovered nicely.
Interesting stats from this report:
The average sales price for homes rose 5%
Pending sales were up 14%
Inventory was down 30.4%
I’m giving you the history of our relationship with Dave because we’ve been working together for six years and he and his wife recently closed on their fifth rental investment property! They learned from the experience of their first home the “Hey, this really works!” feeling, and decided to jump in and build a portfolio of homes over the past few years.
Here’s a quick synopsis of how this most recent deal came together:
- They reached out a couple weeks ahead of their trip back to Kansas City and let me know they would be looking with their Realtor® for their fifth investment property.
- I told them to narrow their search over the weekend and I would plan to visit properties with them the following Monday morning.
- We met Monday morning, looked at a few homes, went to lunch at Joes Kansas City, discussed the pros/cons/potential of each of the homes and chose the “winner.”
- With the help of their Realtor®, they presented the offer, got the property under contract and inspections scheduled.
- I attended the mechanical inspection, took a couple hundred photos and prepared my suggested renovation budget.
- They negotiated post-inspection repairs/price and moved on to closing.
- Final walk-through the day prior to closing – We met at the home with a general contractor to prepare for improvements.
(Outline scope, get bids etc.)
- Closing Day – We went to the home, installed our sign and lockbox and activated online marketing.
- The day after closing – The general contractor began work and leasing agents began showing the home.
- Six days after closing – Offer to lease was presented and accepted. (We actually had 2 competing offers!)
- Fifteen days after closing – Rehab work completed and home inspected for tenant possession.
- Twenty days after closing – Tenants moved into the home.
If you’re ready to jump into the world of real estate investments, give us a call. We would love to help you!