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.
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