No longer selling House #1

Ok, I said I'd keep you posted.  Guess what.  We've decided not to sell house #1.  I'll recap the whole story for you here.  We originally decided to sell house #1 for several reasons:
-- It's the only house in that market and we don't plan on buying any other houses in that market.
-- It was only cash flowing about $150/month and the normal houses we're buying are averaging $300/month or more.
-- We have a lot of equity in the house and could easily buy another house (maybe 2) that cash flow $300/each.  Probably one at $300/month and half the down payment for the second house essentially converting $150/month into $450/month with no extra cash out of pocket.  It's a no brainer.

We tried to see if the renter who's in it wanted to purchase it to keep fees down and she did not.  We then listed it.  We told the management company that we were selling it because in order to make enough money monthly to justify not selling it we'd have to rent it for $950/month (It was renting for $825).  We had just raised the rent from $750 to $825 nine months earlier.

We got the notice on August 1st that the renter was giving her 30 days notice.  So we were staring at probably a month or 2 of no rent before we sold it.  It's a risk you take when you sell the house.  I guess she didn't want to take chance that the new owners would let her stay.  she never did really say why.  Maybe she didn't want people coming in the house when she wasn't home.

Well today (August 26th), we got a call from our management company.  They didn't say why, but the renter has asked if she signed a lease would we take it off the market and continue renting to her.  We said yes.  She's signing the lease and we'll be taking it off the market.

It's just funny how things work out sometimes.  Now it's worth us keeping the house as it cash flows like the other houses we have.  As of October 1st, we will have 5 properties fully rented and cash flowing about $1,500/monthly.

House #4 and #5

So we've officially turned over House #4 to the management company and they are currently trying to place a renter.  I know they've turned down a couple but hopefully we will have someone in there soon.

We've identified House #5 and put in an offer and it's accepted.  This one is in the Jackson area.  We bought it for $93,500 and already have a renter for $1,100.  I'll let you guys do the math on the cash flow of that one.  It's very nice.  These are the kind of deals we're still finding.  We're always on the lookout for these types of houses.  I'll keep you updated as we go through the process.   This will be the 5th house which is a significant milestone for us.  After we sell House #1 and purchase House #5 we'll have 4 houses on the books all making around great cash flow.  We'll then have enough money in the bank for at least 2 more houses immediately. so we'll be back in the hunt again!

Selling House #1 - Update

So I've mentioned in previous posts that we are selling House #1.  It was a great property and a great starter house but the cash flow is just not there and it's in a market/area that we don't want to be in anymore.  Unfortunately, we just got notice that the tenant is moving out.  They gave their 30-day notice.  It may be because there is an MLS key that allows people access to the home while she isn't there.  She may not want to wait around to see if the new owner's want the house or will continue to be investor's.  Either way, we've got 30 days and she's gone.

This is our first time selling an investment property and it's a great learning experience.  After this we should know what to expect which will weigh in our decisions to sell.  So far, nothing has happened that makes us think it's a bad decision.  The house is in an area that we are not and don't know well.  I'm a big advocate of farming where you have a presence, at least in the beginning which is why we're buying where my Dad and Brother live.  Stay tuned for more updates.