September was a great month.
My business partner, Shauwn, and I closed on two rental houses and wholesaled three more; capturing over $42,000 in equity, $650 a month in cashflow, and $7,000 in wholesaling income.
I finished P90X, losing two inches off my waist and ten pounds; college football started after a long agonizing sports summer; and the smoldering Texas heat finally dropped by twenty degrees.
Equity Capture: $42,135
My favorite part of real estate investing is that it can increase your net worth by $20,000 or more almost overnight. That’s because the equity you capture in each house is added on to your balance sheet.
In September, we bought two houses to hold; both fantastic deals in a great neighborhood. I don’t know how we got so lucky, but these two houses popped up at the same time within ten blocks of each other in a very desirable part of San Antonio.
The two houses added $42,135 to our equity capture, bringing us up to $98,946 over five properties for the year.
$14,572 Glendora
$22,939 Blue Lake
$19,300 Artemis
$21,155 Waxwood
$20,980 Rector
$98,946 Total
Cashflow: $660/mo.
These two houses added $660 to our monthly cashflow, bringing us to $1,688 a month in total cashflow for five properties.
$320 Rector
$340 Waxwood
$320 Blue Lake
$338 Glendora
$370 Artemis
$1,688 Total
Wholesale Income: $7,000
Wholesaling is when you get a contract on a property and assign the rights to another investor for a fee. It’s a pretty amazing way to make money as you can see in this article I wrote about one of my first wholesale deals.
We were able to assign two contracts, the first one for $2,000 and the last was for $5,000.
$2,000 1st Assignment
$5,000 2nd Assignment
$7,000 Total
Waxwood
When I first walked into Waxwood, I knew it was a home run.
The average person would have been terrified by the tilted foundation, cracks in the walls and floors, and marks on every surface.
What scared away most kept the price down, and gave us an opportunity to restore a house to greatness.
3 Bedrooms
1 Bathroom
1057 Square Feet
I liked the neighborhood because it was on the high end of our “bread and butter” model: after-repair values in the $80k – $120k range. The rents were strong and houses didn’t stay on the market more than a couple of months.
We bought the house for $51,345 in a $100k+ neighborhood. After fixing the foundation, replacing the roof, refinishing the kitchens & bathrooms, painting the walls, replacing the fixtures, and refinishing the wood floors, we will have spent $20,000 on the rehab.
$ 51,345 Purchase Price
$ 20,000 Repairs
$ 2,000 Closing Costs
$ 73,345 ALL IN
It will be worth $105,000 after the repairs, which gives us an equity capture of $21,155 after discounting for the cost of sale if we sold it (realtor commission and closing costs).
$105,000 After Repair Value
$ 73,345 All In
$ 10,500 Cost of Sale
$ 21,155 Equity Capture
The cashflow is solid, as houses on the block are renting for $975 – $1050. We plan on putting it on the market for $950, sticking to our “best product, best price” model.
$ 950 Monthly Rent
$ 610 Monthly Expenses
$ 340 Cashflow
Rector
A week after we locked down Waxwood, a house popped up just 10 blocks away on Rector. Shauwn was the first to see this one and he thought it was an even better deal.
2 Bedrooms
2 Bathrooms
1402 Square Feet
We were getting it a little cheaper than Waxwood, so it gave us a little more room to breathe on the rehab. Once again, it was pretty scary on the inside to the average eye: Foundation was off, cracks in the walls, marks everywhere.
We bought it for $50,500 and once again, it’s in a $100k+ neighborhood. .
$ 50,500 Purchase Price
$ 23,000 Repairs
$ 2,000 Closing Costs
$ 75,500 ALL IN
It will be worth $107,200 after the repairs, which gives us an equity capture of $20,980 after discounting for the cost of sale if we sold it (realtor commission and closing costs).
$107,200 After Repair Value
$ 75,500 All In
$ 10,720 Cost of Sale
$ 20,980 Equity Capture
It’s in the same neighborhood as Waxwood, so we plan on putting it on the market for $950.
$ 950 Monthly Rent
$ 630 Monthly Expenses
$ 320 Cashflow
Looking Forward
Since Shauwn and I started investing together at the beginning of this year, every month has been more successful than the last. We’re ready to continue that tradition and make October an even better month.
Thanks for sharing info with others so we can learn.
A few questions though:
1. Didn’t see income info from October 2007 to August 2010
2. Didn’t see income stream after September 2010
3. Really liked the “”before” video of the house you bought as investment property, but couldn’t find the “after” video. Is it posted somewhere else?
I envy you! I wish I had your luck. it was nice of you to be very detailed on your income report. I can’t find a lot of people who are as open as you when it comes to their finances.
Wow! Congratulations to you and I hope you get more productive months just like September 2010. I think I should also do this and start documenting how much I earn every month, just so I have a basis of my productivity…
Don’t be jealous.
Read the income report, and think how you can increase your own. Only way to move forward.
Did I miss something?
Have you posted somewhere how much money you make from this site?
How do you qualify for loans without a job?
Brian,
How do you pay for the repair costs on your flips? Financing, out of pocket, etc? Thanks in advance
Hey Torrey. We pay for the repairs in the financing… So a lender gives us the money to buy and rehab the house.
A warm greeting from me. I like the way you’ve listed so perfect. Since one can be envious.
Hi Brian, that’s a good passive income earning $1688. I hope I can also earn that in my online venture. By the way, it’s my first time here, and your income post was the one that has caught my attention. 🙂
Wow! The income is impressive. You really have your thing in the real estate. I look forward to reading more:-)
Looking forward to your next blog…. best of luck! 🙂
Fantastic on adding the equity and income but even more impressive are the P90x stats. I was going to do the program but I opted to see if I could line up 4 weeks of consistent workouts before ramping it up to P90x level!
Thanks! It really did make a big difference. Right now, I’m doing it 3 days a week for maintenance and I’ll kick it up again in January.
This is a great site. I love the Twitter Widget and the Monthly updates. Good vidoes too. Good luck in October.
Kevin
Always wanted to try real estate investing. One day maybe. I did P90X too, lol.
That’s a very nice position to be in. I wish I can say that of me.
Hi Brian,
Thanks for your article. Are you financially free now – living on passive income?
Gee … can you get some good deals for me? 😉
I still have a job, but it’s hard to call it that since I teach real estate and am allowed to do my own deals all day. The nice thing is that I have a choice. If I start to become unhappy there, I’ll bolt.
Great stuuf, Brian. I’ve been reading Genius Types for a couple of years and I’m really impressed with your progress. I’d like to do the same, but unfortunately I don’t have access to Lyfestyles Unlimited here in Europe.
One question: How do you guys actually find these properties?
We find properties with a combination of networking with wholesalers, having agents put bids out for us, and marketing to find people who need to sell their homes.
I’m so jealous.
Wow…that was a very detailed report! $1688/month in passive income is really not bad. And considering you only started investing only this year, I think that’s very encouraging.
So what’s your plan for the month of October?
Dan