Maurice and I have a new real estate partner, Rick Vullo. The first time I met him Rick he stopped by the Forest four-plex when I was in the thick of fixing them up. I asked him what he did. He said, "I'm a real estate investor." I said, "What?" He said, "I buy properties and fix 'em up." I said, "I bought this place." He said, "I know. I bid against you." Rick is an expert on foreclosures and trustee sales and Maurice just got his real estate license.
So far, as a troika, we've bought six properties, three buy and holds and three buy and flips.
This fourplex is the first thing Bosc + Tonnesen Properties (our new company) has closed on. We did it long distance (Maurice waws still in Spain) but it was such a good deal we moved forward without him seeing it.
When we first looked at these two foreclosed duplexes about three months ago there were three For Rent signs for other apartments on the street. They're all still there. Despite being close to the Tempe, ASU campus it's hard to rent anything right now because there are so many new apartment complexes all going after the same students. At this writing we are still a two weeks away from finishing the fix-up of the adjacent property, but they are all rented Our marketing plan and the oddity of the fix-up is working.
Like everyone else we wanted to buy something in this depressed real estate market. We tried short sales but after making offers on four or five houses and getting nothing we wised up and went with foreclosures. We just had our offer on a four-plex accepted and we’re feeling simultaneously rich and poor. It’s nice getting quick decisions compared with the baloney run around on short sales.
The bottom line for us is if you borrowed all the money at a fixed 15 or 30 year rate would the rental income cover the payments (including money to fix it up) and even generate some positive cash flow. For the first time I can remember, it can.