Back again with another “I can’t believe that this fell into my lap!” Success Story. When we retired to Tennessee, the first property we bought was a 1949, 2-bed, 1-bath farm house on an acre within the city limits with a 600 square foot loft barn in good condition. The house was in good condition, and we thought that we wanted to make it our primary home by adding on and renovating.
Well, in that same time period we bought the 1959, 3-bed, 2-bath repo (see other Success Story) and had that to work on as well. After many floor plans that amounted to about $150,000 in renovations, we decided that we could buy another house instead of remodeling that one.
So we decided to renovate it and rent it. We upgraded the kitchen with additional cabinets and new appliances including a dishwasher, disposal, and microwave, which this house did not have. We leased it for a year for $600 a month. A modest 7% return on our approximate $85,000 investment.
A year went by, the renter always paid the rent–usually by the grace date–and we did not have to do anything to the house in the course of the year.
But we just did not like being landlords, so we touched the place up after the renter moved out an put out a sign. We got 3 to 6 calls per week from the sign, and because it was a two bedroom, it was going to be a little harder to sell, but we could afford to sit and wait.
Along came a lady who had seen it when we had bought it a year before and just loved our little yellow house (we had yellow vinyl siding installed over the ugly green asbestos siding). She asked the usual questions, how much, how big, how old, etc. I told her the answers, but she was also telling me about her current situation.
Her husband is ill with a lung disease and is on oxygen. They would like to be in town close to the local regional hospital and her mother, which our house is.
She tells me she is currently living out at Centerhill Lake, a large recreation area and reservoir, in a 2-bed, 1-bath 10-year-old mobile on an acre lot. The house is in great condition and has a nice deck with a lake view above the trees and other improvements.
She goes on that she would have to put that house up for sale to buy mine and would need to get about $80,000 for it. As I’m listening to her go on about her property, it occurs to me that I would like to have a lake property someday, and I asked her if she simply wants to trade deeds.
She was stunned and asked, “You would do that?” And I reply, of course as I desire a lake property and she needs an in-town property. Even though I’m trading down slightly, $90,000 down to $80,000, I feel that I am getting a good investment because lake-view property in our local is appreciating faster then in-town property. If I put an actual house on it someday, it’s value would probably go up drastically.
In the meantime, we and our friends can enjoy a vacation home that is only minutes from our primary home.
From her point of view, she is getting a great deal because she is getting what she needs and doesn’t have to go through the hassle of selling and waiting because her primary objective is taking care of her husband. So the situation is a win-win for everyone, and that’s the best deal anyone can make!
The moral of the story is that because I simply listened to what the woman was saying, and kept an open mind as to the ways a person can benefit from real estate, I was able to see opportunity that actually benefited both parties.
Editor’s Note: This is Ed’s second Success Story! Read his first:
Who Said Real Estate Investing Is Hard Work?