SOLD - Background
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SOLD - Background (by Hoosier [IN]) Oct 5, 2022 3:29 PM
       SOLD - Background (by MC [PA]) Oct 5, 2022 4:16 PM
       SOLD - Background (by James [GA]) Oct 5, 2022 4:52 PM
       SOLD - Background (by Mike SWMO [MO]) Oct 5, 2022 5:17 PM
       SOLD - Background (by RB [TN]) Oct 5, 2022 5:29 PM
       SOLD - Background (by 6x6 [TN]) Oct 5, 2022 7:58 PM
       SOLD - Background (by Bonanza [NC]) Oct 5, 2022 8:33 PM
       SOLD - Background (by Dee Ann [WI]) Oct 5, 2022 10:17 PM
       SOLD - Background (by Otis [IL]) Oct 5, 2022 10:56 PM
       SOLD - Background (by Robin [WI]) Oct 6, 2022 8:07 AM
       SOLD - Background (by S id [MO]) Oct 6, 2022 8:57 AM
       SOLD - Background (by Hoosier [IN]) Oct 6, 2022 4:04 PM

SOLD - Background (by Hoosier [IN]) Posted on: Oct 5, 2022 3:29 PM

Ok, time to start telling the stories...

We HAD 5 rentals. Started selling about a year ago...I wanted to keep it quiet until mostly done. I'll post separately about each house...but first let me explain why we sold....this is the background!

We had 5 rental units for about the past 13 years. Bought them over the course of 2.5 years...paid cash for all of them. I got into rentals for a few reasons, but the main one was to diversify our investments away from the stock market, as I worked as an executive at a Fortune 500 company and most of our savings was in a 401k in stocks. My goal was to have a certain percentage of our investments in real estate...and the 5 rentals got us there.

I managed them, and I did 80% of the work. Some things I hired, such as roofing, vinyl siding, major electrical (I can do basics like adding switches and outlets, but rewiring a whole house is beyond me), major plumbing (again, I can replace a sink/trap/faucet, etc...but when I remodel I put all NEW stuff in, like replacing cast iron drain pipes with modern PVC, etc.), and so on.

I did things like paint, flooring, door handles, adjusting doors so they open and close well, trim carpentry (my specialty...I have a woodshop in my basement and can do almost anything with a matter of fact I made most of my own trim like baseboards), replacing doors, minor electrical, water heater replacements, HVAC duct repairs, basic plumbing, chimney repairs, window repairs, minor concrete work/masonry, drywall, and so on.

I retired from the executive job and became a home inspector just as we started buying the rentals. This worked great, as I could look at a house for 20 minutes and inspect the key things like breaker panel/wiring, attic condition for mold/insulation, roof/shingle/chimney condition, crawlspace issues, and understand the conditions of furnaces/water heaters/appliances, etc. I would then make a cash offer with no inspections, and this allowed us to offer about 5% below the asking prices and get the houses against bids that were higher but involved financing and inspections. We were able to close on a house within about 8-9 days.

Life was good...we'd get a house that was "outdated" in terms of both appearance and mechanically (old plumbing pipes, old ungrounded wiring, old windows, old trim, old cabinets, etc.) and I was able to do most of the work...we'd completely rewire the houses (Licensed electrician would bring in more power from the power company..we'd upgrade from 60A fuse panel to 200A breaker panel...but I'd save money by mounting and wiring all the outlets and switches), replumb and go to all PVC and PEX for plumbing (again with me doing the sinks/faucets but the licensed plumbers doing all the stub ins, shower installs, etc.), install vinyl siding on one house (others were brick or stone), and so on.

I did things differently than what many on here teach...I put most of the money into the things the tenants can't easily damage...the wiring, roof, chimney, smoke alarms, floor joists/structure, ceiling fans, plumbing in crawlspace/walls, attic ventilation, and so on. I spent precious little on appliances, sinks/faucets, I didn't do entire room painting...instead I'd touch up bad areas, would not do drywall repairs unless absolutely necessary, make my own wood baseboards for pennies per foot, and so on. I never did any landscaping/flowers, etc.

My goal in doing it this way was to minimize service calls, as I wanted the freedom of not having people call with things broken on a holiday in the middle of dinner. It was successful, as I averaged 1.2 unscheduled service calls per phone almost never rang! Our houses were not always freshly painted with brand new flooring, but they rarely broke.

As a result of paying cash and having almost no repairs needed (except at move out), our cash flow was excellent. About 72% of the rent was pure profit.

Our houses ranged from an 825 sqft 2 BR 1 bath with a detached garage renting for (recently) $810/mo up to a 1,270 sqft 3 BR, 2 BA, large carport with full basement house that rented for $1,270/mo. We also charged for animals...these were the base rents...and we had LOTS of tenants with most rents were $50-$100 higher than those rents. Our house ages ranged from 1948 to 1964.

But due to a variety of factors...

1) I'm getting old and don't want to (or can't) work on them anymore....I injured my knee earlier this year and have an upcoming knee surgery.

2) Wife is concerned that if I passed away young (no, I'm not terminally ill lol) that she'd have to deal with all the complexities of liquidating the business

3) RE values are way up here, great time to sell

4) Tenants moving out...regular turnover, good time to sell

5) We are considering moving to another state with better weather

we decided to slowly unwind the business. We sold one unit in late 2021, 2 units so far this year, one more pending and should close within a month, and then we plan to sell the last unit in early 2023.

Ok, so that's the background. Later or tomorrow I'll begin new posts with a "story" about each of the houses.

It's been interesting being a landlord, some parts of it fun, some parts frustrating. But it's time for us to leave this to others and move on. I really enjoy this forum and learning from all of you...I get a lot of laughs and do a lot of head shaking.

That's it for now!

SOLD - Background (by MC [PA]) Posted on: Oct 5, 2022 4:16 PM

Enjoy. We started selling as well. Kids don't want them and it is time. Govt interference is creeping in with inspections/ESA, etc. When you have to watch your words all the time so you don't violate someone's feelings or "liberties", it is time to go.

SOLD - Background (by James [GA]) Posted on: Oct 5, 2022 4:52 PM

I for one appreciate the story and what I can learn as I have several years before I'm ready to sell.


SOLD - Background (by Mike SWMO [MO]) Posted on: Oct 5, 2022 5:17 PM

What I would like to see is a "Writing" contest between Hoosier and SID

Both do VERY well!!! --71.29.x.xx

SOLD - Background (by RB [TN]) Posted on: Oct 5, 2022 5:29 PM

I hear ya,

and can relate to your plans / efforts.

SOLD - Background (by 6x6 [TN]) Posted on: Oct 5, 2022 7:58 PM

Thank you for the background.

Like you, I am trying to buy with cash and I do most of the work myself. The house that I am currently working on, I am rewiring it myself, with the exception of having the disconnect changed outside that connects to the pole. I am also doing all of the plumbing myself. When I did my rental, I also wanted to replace all of the major things so as to not get a lot of service calls, and as you mentioned, it works well. So, your methods are familiar.

I look forward to hearing your stories of the houses.

I hope that you still visit and post on this forum.


SOLD - Background (by Bonanza [NC]) Posted on: Oct 5, 2022 8:33 PM

Can you take your sale price and divide it by your yearly gross income for the property for each property and give us a range or some numbers

For example if you sold the house for 144,000 and it grossed 14,400 a year, you sold it for 10x the gross rent.

Just wanting to get a feel for the market in other places.

SOLD - Background (by Dee Ann [WI]) Posted on: Oct 5, 2022 10:17 PM

Interested in hearing your ideas on states with better weather to move to...

Looking at floods, fires, hurricanes and such, we are happy to be where we are in Wisconsin, but would like a more wooded area.

Where were you thinking, Hoosier? --75.11.xx.xx

SOLD - Background (by Otis [IL]) Posted on: Oct 5, 2022 10:56 PM

Hey Hoosier thought I was having deja Vu there for a minute. I think you are on another financial forum that I read right before this one every night. Congrats on unwinding your rental business. Time to really enjoy life and not have to worry about tenants anymore.

SOLD - Background (by Robin [WI]) Posted on: Oct 6, 2022 8:07 AM

I don't read many "end of the story" threads on here. Thank you for taking the time to share yours! I too would be interested in seeing your numbers.

SOLD - Background (by S id [MO]) Posted on: Oct 6, 2022 8:57 AM

Wow, that's a really cool story! Congrats on living your dream and now moving on to the next dream.

Your post about why you're getting out motivates me to continue rethinking my plans. I doubt that I'll ever get totally out of the game, but I do like where I'm at right now with hiring out 90% of everything. I basically keep the books and the screenings, and the rest of my time is spent hunting the next deal. I should hire those things out, but I don't spend much time doing them, and like you with your wood working skills I'm a numbers and research geek, so I don't mind doing it. Kinda fun and keeps me in the day to day enough without it being a burden.

But some day I'll likely outsource those tasks as well. I want to travel more once the kids are out of the house (about 5 years), and then I'll need to be able to disappear for 1-2 months at a time and have zero issues to deal with. This is part of why I'm transitioning into commercial space where the tenants are more self sufficient and there are fewer units to deal with, but each unit brings in more $ per tenant. It's easier to manage one $2000/month tenant that three $675/month tenants.

Looking forward to reading your individual house sale stories!


SOLD - Background (by Hoosier [IN]) Posted on: Oct 6, 2022 4:04 PM

Mike (SWMO) - LOL

6x6, yes, I will still visit the forum!

Bonanza, let me work on that.

Dee Ann, we are considering North Carolina in the Cary/Apex/Holly Springs area, but have also looked at Tennessee just south of Nashville, southern Colorado, and even South Carolina. North Carolina is the leader so far.

Otis LOL, that's me! Glad to see others on there! Even thought I have a Master's degree in Finance, I still learn things on that forum!

Robin - Thank you

Sid - Thank you. And as you know, I think a lot like you and often compliment you on your thoughts and ideas. I too looked at commercial early on, but as I've posted before, I felt I wasn't "smart enough" to deal with the professional business owners during negotiations, AND I didn't have quite enough money to buy the types of buildings I wanted. I probably should have put together a "consortium" of 5-6 similar investors to me and we could have bought something really nice together. But that ship has sailed! I'm sure you'll do well at whatever you decide.

Ok, now let me work on some new posts....

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