“I’ll look,” I said, and I bought the house a half hour later for $20,000
less than his asking price.
It was a cute little two-bedroom home, with gingerbread trim on all the
windows. It was light blue with gray accents and had been built in 1930.
Inside there was a beautiful rock fireplace, as well as two tiny bedrooms. It
was a perfect rental house.
I gave the owner $5,000 down for a $45,000 house that was really worth
$65,000, except that no one wanted to buy it. The owner moved out in a
week, happy to be free, and my first tenant moved in, a local college
professor. After the mortgage, expenses, and management fees were paid, I
put a little less than $40 in my pocket at the end of each month. Hardly
exciting.
A year later, the depressed Oregon real estate market had begun to pick
up. California investors, flush with money from their still booming real
estate market, were moving north and buying up Oregon and Washington. I
sold that little house for $95,000 to a young couple from California who
thought it was a bargain. My capital gains of approximately $40,000 were
placed into a 1031 tax-deferred exchange, and I went shopping for a place
to put my money. In about a month, I found a 12-unit apartment house right
next to the Intel plant in Beaverton, Oregon. The owners lived in Germany,
had no idea what the place was worth, and again, just wanted to get out of
it. I offered $275,000 for a $450,000 building. They agreed to $300,000. I
bought it and held it for two years. Utilizing the same 1031-exchange
process, we sold the building for $495,000 and bought a 30-unit apartment
building in Phoenix, Arizona. We had moved to Phoenix by then to get out
of the rain, and needed to sell anyway. Like the former Oregon market, the
real estate market in Phoenix was depressed. The price of the 30-unit
apartment building in Phoenix was $875,000, with $225,000 down. The
cash flow from the 30 units was a little over $5,000 a month.
Dostları ilə paylaş: